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CMMSandEAM06

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CMMSandEAM06 Powered By Docstoc
					Aryana Group - IPAMC 2006
CMMS (Computerized Maintenance Management Systems) and EAMs (Enterprise Asset Management systems)
Ben Stevens OMDEC Inc Ben@omdec.com

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 1

Today’s Agenda • • • • Definition and Structure of CMMS/EAM Benefits and Values How to achieve the payback benefit Cost control with CMMS

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 2

CMMS/EAM – ERP
Work Maintenance = Management Inventory Purchasing Materials = Management CMMS

+

Work Materials + Management = Management CMMS + Asset + Management HR+ Finance + InterPlant Manufacturing =

EAM

EAM

+

=

ERP
www.ipamc.org

Ben Stevens, OMDEC – “CMMS and EAMs”

3

What is EAM?
A powerful software tool ….. that still requires People to make the improvements
Work Request Equipment Labour Materials and Tools Contractors Best Practices

PM

Maintenance Plan

Analyse Data Work History Equipment History

Collect Data

Breakdown

Work Order

Schedule and Issue WO

Complete Work

Check Labour Check Contractor Availability Issue Picklist, Availability Check Equipment Check Tools Issue Materials Availability Availability Materials Check Materials Receipt Availability OMDEC – “CMMS and EAMs” Ben Stevens,

Trigger Purchase Requisition Trigger Purchase www.ipamc.org Order
4

Objectives of CMMS/EAM
• Probably the best single tool to drive maintenance improvement:
– – – – – – Organize how we do maintenance Track what we have done Provide the basis for analysis Prompt maintenance improvement Drive maintenance cost control Store our knowledge history of maintenance
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 5

Is a CMMS / EAM for you?
1 2 3 4 5 6 7 8 9 10 More than about 500 assets Pressure to increase reliability, reduce downtime Belief that you need to do more PM and CBM Breakdowns happen too frequently and are too expensive Work is interrupted or delayed due to missing parts Pressure to reduce the cash tied up in parts Current Reports about Maintenance are not very useful Want to continuously improve Maintenance Management will invest in a long term improvement plan Pressure to increase Maintenance Effectiveness and reduce costs

Score 10 each if this matches your situation, down to 0 if it is not relevant. Anything above about 50% means you are probably a good candidate for a CMMS Ben Stevens, OMDEC – “CMMS and EAMs”

Total =
www.ipamc.org
6

Today’s Agenda • • • • Definition and Structure of CMMS/EAM Benefits and Values How to achieve the payback benefit Cost control with CMMS

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 7

Here’s a CMMS Value Test – score 5 if you are perfect; down to 0 for the reverse
1 2 3 4 5 6 7 8 9 10 All critical equipments are in the system All critical spares are in the system All the data is accurate and reliable All non-critical equipment and parts should be in the system 70+% of your work is done against PM WO’s All PM’s are reviewed annually for relevance and accuracy All corrective work is done from WO’s All breakdown work is recorded on templated WO’s WO’s collect data on material and hours used, equipment condition and failure causes All WO’s make sense (according to the technician)
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 8

Part 2 of the CMMS Value Test – score 5 if you are perfect; down to 0 for the reverse
11 12 13 14 15 16 17 18 19 20 95+% of your work is scheduled Parts pick-lists are prepared automatically from WO’s Parts replenishment is driven by automatic ordering Overdue WO’s are reviewed weekly All breakdowns are scrutinized to update the PM program The system prompts regular ABC counts Reports are useful and accurate The system ties into your performance management system The system prompts maintenance improvement Someone is specifically responsible for generating more value from the system

Total
Ben Stevens, OMDEC – “CMMS and EAMs”

www.ipamc.org
9

How did you make out?
100 90 80 70 60 50 40 30 20 10 0

Innocence Awareness Understanding Competence Excellence I don’t believe you

Score
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 10

Most benefits result from .....
• Improved equipment performance (reliability, uptime, life cycle cost) • Productivity improvement – tradesmen - engineers – supervisors - stores keepers – buyers - managers – Contractors • Lower Spares Inventory cash investment • Cost savings for Direct Purchases though lower Spares prices
Ben Stevens, OMDEC – “CMMS and EAMs”

www.ipamc.org
11

Paybacks
Paybacks will vary according to the current state of your plant and its maintenance practices

The numbers we will use to-day are typical rules of thumb, and are based on introducing an initial CMMS or the upgrade of neglected system
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 12

Paybacks from Equipment
improved Maintenance program means...
More effective Preventive & Predictive Maintenance fewer breakdowns, (more uptime) faster mean time to repair (more uptime again) smoother running equipment (higher productivity) longer productive life for equipment... higher quality product

2 - 5% increase in uptime
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 13

Paybacks from Manpower Effectiveness (1)
improved work order processing means less wait time, more wrench time for trades, integration of materials planning means less wait, pick or search time at stores better data identifies repair time anomalies which improves training effectiveness
Unplanned work costs 1.5 - 3 times more than planned work

Manpower productivity up 10 - 25%
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 14

Paybacks from Manpower Effectiveness (2)
Better planning and better resource scheduling means reduced overtime And reduced sub-contract cost

Overtime down 10 - 50% Contractor costs down 25 - 50%
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 15

Paybacks from Materials
job plans show what materials are needed and when this causes better buying decisions fewer rush orders reduces overstocking stock the RIGHT item at the RIGHT time
5-10% of Inventory Value 5-10% of Materials Cost per Work Order
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 16

Paybacks from lower administration costs
Automating documentation (work orders, templ;ated job plans, work requests, materials requisitions, materials issue slips, purchase requisitions……) Integration with collateral systems (document management, contract management, CBM Moving to paperless……
Divert 50+% of admin effort to useful work
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 17

Are the savings reasonable?
AT Kearney/Industry Week Feb 1990:
28% increase in maintenance productivity 20% decrease in equipment downtime 20% decrease in maintenance materials costs 18% decrease in maintenance stores values

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 18

Are the savings reasonable? (2)
Plastics Plant:
75% reduction in stores value 65% reduction in downtime in 24-hour a day operations 25% increase in maintenance manpower productivity 90% reduction in maintenance overtime over a three year period

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 19

Benefits to Clients
Maintenance 1. Increased Planned Maintenance + decreased unplanned maintenance 2. Less Waiting Time 3. Increased Productivity 4. Reduced Emergency Work 5. Less Overtime 6. Decreased Backlog 7. Less Contract Labour 8. Reduced Staffing
Ben Stevens, OMDEC – “CMMS and EAMs”

Average 78% 29% 29% 31% 22% 34% 26% 14%
www.ipamc.org
20

Benefits to Clients
Stores and Purchasing
1. Fewer Emergency Reorders 2. Reduce Stock-Outs 3. Greater Inventory Turnover 4. Reduced Inventory Value 5. Fewer Line Items Kept 6. Improved Vendor Pricing 7. Lower Stores Staffing Costs

Average
33% 29% 37% 21% 12% 13% 14%
www.ipamc.org

Ben Stevens, OMDEC – “CMMS and EAMs”

21

Today’s Agenda • • • • Definition and Structure of CMMS/EAM Benefits and Values How to achieve the payback benefit Cost control with CMMS

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 22

Warning….
• Most benefits statements are not much more useful than promises of magic
So we have to dig much deeper

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 23

This should be your starting point
Monthly and Annual Spending on: 1. Regular Maintenance 2. PM’s 3. Emergency Repairs 4. Special projects
Materials $
12,440 4,500 4,500 2,550 23,990

Equipment
#5 winder - Regular - PM’s - Emergency - Special Total

Labour $
15,250 3,240 5,200 3,500 27,190

Contract $
Nil nil nil 45,000 45,000

Tools $
300 nil Nil Nil 300

Total $

Comments
Another breakdown last month! Should be solved by the major refurb

27,990 7,740 9,700 51,050 96,480

Hot Press Indirect and Overhead

Total
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 24

The Payback Process
Benefits Definition Payback Quantification Benefits Commitment

Benefits Delivery

Payback Measurement

Payback Realization Planning

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 25

General Procedure
Identify the sources of the benefits Convert the benefits into paybacks Quantify the paybacks Prioritise them Assign accountability and authority to achieve them • Measure the paybacks • Publish the results • Reward successes
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 26

• • • • •

Benefits Definition

• Start with the Project Objectives:

Benefits

• “To acquire and implement a CMMS which will:
– – – – improve maintenance effectiveness prompt better material management provide better information increase equipment uptime”

• Question… Did the project objectives specify numbers --- if not, that’s a good reason for not getting the payback.
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 27

Benefits Definition

For each objective….
• Define the key benefits improve maintenance effectiveness

More PM’s

Lower Contractor Costs

Better manpower planning

Fewer breakdowns

Quicker Repairs
www.ipamc.org
28

Ben Stevens, OMDEC – “CMMS and EAMs”

Payback Quantification

Payback chart….
• For each benefit, create a Payback Chart, asking the questions:
– Can we measure the improvement? – Can the improvement be translated into $.

• If so, fine • If not, subdivide and redefine the benefit
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 29

Payback Quantification

Example….
Measure? Translate into $? Yes: 1. Reduced manpower per job saves $X 2. Increased Uptime = increased Production = $YY extra Revenue

Benefit

Quicker Repairs

Yes: Mean time to Repair

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 30

Payback Quantification

Example….
Benefit Measure? Translate into $? Better manpower planning No:

Less scheduled Idle Time = less overtime

Yes: Hours Overtime

Yes: 1. Reduce labour Costs - save $X 2. Reduce contractor Costs - save $Y
www.ipamc.org
31

Ben Stevens, OMDEC – “CMMS and EAMs”

Payback Quantification

For each benefit…..
Benefit Fewer breakdowns KPI MTBF Original value 500 hours Target Value 650 hours Payback 4 repair jobs per year x $12,000 6% x 6400 hours x $17,000 per hour
www.ipamc.org
32

% Availability

80%

86%

Use the cost statement as the basis for these calculations.
Ben Stevens, OMDEC – “CMMS and EAMs”

This should be your starting point
Monthly and Annual Spending on: 1. Regular Maintenance 2. PM’s 3. Emergency Repairs 4. Special projects
Materials $
12,440 4,500 4,500 2,550 23,990

Equipment
#5 winder - Regular - PM’s - Emergency - Special Total

Labour $
15,250 3,240 5,200 3,500 27,190

Contract $
Nil nil nil 45,000 45,000

Tools $
300 nil Nil Nil 300

Total $

Comments
Another breakdown last month! Should be solved by the major refurb

27,990 7,740 9,700 51,050 96,480

Hot Press Indirect and Overhead

Total
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 33

Benefits Commitment

Prioritise the benefits
A1 O1 S1 S5 S2 P4 C1 S4 A3 C4 O2 A5 A6 A4 T1 IN1 M1 O11 T2 S3 P2 T5 IN7 O12 O9 P9 T9 C8 IN4 C2 C7 O8 IN3 IN2 C6 C5
O

HIGH

O7

F1
S

Strategy Organization & Change Management Tactics Planning & Scheduling Measures Materials Management Systems (CMMS) Reliability TPM & Autonomous Maintenance Processes

O3

P1

P5

T7 O4

M5

O10 M3

M4 R1 IN6 P7

R2 IN5 C3
T

MED

O14 O5 IN8 T4 C9 P3 O13 P6 P8

T6 F3

F2
P

Benefit

T3

M2

M

A2

T8

IN

LOW
O6

C

R

A

F

LOW

MED

HIGH

Difficulty to Implement
Ben Stevens, OMDEC – “CMMS and EAMs”

www.ipamc.org
34

The Payback Process
Benefits Definition Payback Quantification Benefits Commitment

Benefits Delivery

Payback Measurement

Payback Realization Planning

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 35

Paybacks Realization Planning

For each major benefit …..Prepare an Action Plan
What has to be done Who is involved Any training Any process redesign Tools needed Progress Monitoring Rewards • Milestones • Timing • Materials • • • • Measurements Tasks Resources Feedback
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 36

Benefits Measurement

• Must be
– – – – – – –

quantifiable relevant Reliable, consistent repeatable simple to understand simple to collect Easy to display
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 37

Benefits Delivery
1. 2. 3. 4. 5. 6. Set the measurements up as a regular weekly/monthly work order Review them at the weekly Mtce mtg Make sure the responsible person knows it AND has the authority to make it happen Reward success Provide feedback to the Project Champion

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 38

Today’s Agenda • • • • Definition and Structure of CMMS/EAM Benefits and Values How to achieve the payback benefit Cost control with CMMS

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 39

So how do we get going????
– Cost Control with CMMS?EAM – Understand your company’s current cost process
• Capital cost • Operating cost
– – – – –

– Build a Plan – Measure, Analyse and Feedback – Make it a part of your on-going process
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 40

Materials Labour Contractor Tools Special projects

A dozen Cost Reduction Quick Fixes using EAM
1. 2. 3. 4. 5. Equipment Materials Jobs and Tasks Data Integrity Planned Work 6. Scheduling 7. PM/CBM Compliance 8. Performance Management 9. Procurement

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 41

1. Equipment - Quick fix.
• Breakdowns force you into reactive maintenance • Most breakdowns occur on a small group of equipment • Use the EAM to select the frequent failure equipment • Define the Failure Costs for each key equipment • Hit the bad actors with an improvement plan built into EAM • Use EAM to measure OEE (Overall Equipment Effectiveness and track critical failures • Build EAM tasks to prevent critical failures • Track the monthly failure costs of your key equipment
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 42

2. Materials - Quick Fix
Define materials costs: - purchase costs, total inventory value, Inventory carrying costs, expediting costs, picking and delivery costs to the job-site, costs of poor service levels.

In EAM:
Standardise names Standardise numbering system Eliminate Duplicates Consolidate Vendors Identify obsoletes Re-order based on EOQ’s and delivery times

On the Job:
Sell/junk the obsoletes Rationalise warehouses Rationalise storage locations Issue picklists from EAM direct to stores Do kit-ups based on planned work orders from EAM Deliver to work site
www.ipamc.org

Track theBen Stevens, OMDECcosts ofand EAMs” monthly total – “CMMS your materials

43

3- Jobs and tasks - Quick Fix
Understand how CMMS calculates Labour costs Track labour costs monthly by equipment or system, and by type of work Understand your cost relationship between PdM, PM and Corrective • • • • Make sure all PM’s are in EAM Review current PM’s (improve? expand? consolidate? delay? streamline? eliminate?) Use EAM scheduler to dedicate staff to PM’s Review all work orders on closure as they are entered into EAM (convert to PM’s? work description? Materials list? Failure codes? Priority? Time required? Materials available? Template it? ) Schedule in EAM by area, by craft, by equipment hierarchy Use EAM to examine contractors – can we replace inhouse Can PdM replace PM and Corrrective?
www.ipamc.org
Ben Stevens, for major systems and 44 Track labour costs monthly OMDEC – “CMMS and EAMs” types of work

• • •

4- Data Integrity – Quick Fix
• Objectives
– – – – Collecting the most accurate cost data possible Structuring data for consistency Make it easy to collect and enter Validate accuracy when closing work orders

• How EAM can support these objectives:
– – – –

Security restrictions as appropriate for your processes Use of pick lists Customized data entry forms Automatic data collection (from sensors, wireless scanners) Bad data is worse than no data
Ben Stevens, OMDEC – “CMMS and EAMs”

www.ipamc.org
45

5- Planned Work – Quick Fix
Planned work typically costs 1/3 to 1/10 as much as unplanned work

• Objectives

– 90+% of work should be planned (especially emergency repairs) – Never plan the same job twice

• How EAM can support these objectives:

– Build planning into the maintenance process – Measure planning effectiveness – Use standard job templates and safety plans whenever possible – Choose a similar job and modify it – Track the amount of Planned work monthly
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 46

6- Effective Scheduling – Quick Fix
Understand and measure the cost of poor scheduling of labour, contractors, materials and tools

• Objectives

• How EAM can support these objectives:
– – – – –

– Allocate labour to Work Orders in the order of WO priority – Allocate materials to the highest priority jobs – Work within the constraints of labour and material availability, equipment availability, etc. Flag critical equipment, critical jobs and critical spares Use priorities to set work order and backlog sequence Use capacity scheduling tools Use the labour skill-sets tools Use automatic assignments in CMMS www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 47

7- PM/CbM Compliance – Quick Fix
Understand the added value of PM/PdM Understand how often they are NOT performed properly

• Objectives

• How EAM can support these objectives:
– – – – –

– Perform PM/CbM tasks on time – Execute tasks completely and consistently – Do it right first time

PM/CbM tracked within the overall work order backlog Standard Job Plans define work requirements Review WO’s on closure Track rework (same job on same equipment within X days) Set up performance measures and use EAM to track results
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 48

8- Performance Measurement – Quick Fix
• Objectives
– Measure the performance of your processes – Make the measurements meaningful at all points in the organization – Simple to calculate, simple to display

• How EAM can support these objectives:

– Source of data for performance measurement – Automatic reports and graphs – Create regular WO’s to cover collection and analysis
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 49

9 - Procurement – Quick Fix
Measure the cost of poor procurement – late materials, poor quality “cheap” materials, wrong materials

• Objectives

• How EAM can support these objectives:
– – – – –

– Smarter Buying – Cheaper Buying – Just-in-time Buying

Vendor analysis Delivery times Pricing Agreements Vendor consolidation Spend time thinking and improving rather than pushing paper www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 50

Using EAM to improve Maintenance Cost Performance

The longer term: 1

PM/CbM

• Manage time-based and meterbased PM • Trigger Condition-based work orders

Long-term Asset Planning

• Plan long-term maintenance and upgrade requirements • Record results of root-cause failure analysis • Analyze failure histories • Manage labour requirements • Forecast Skills shortages

Reliability Engineering

Workforce Planning

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 51

Using EAM to improve Maintenance Cost Performance
Integrated Procurement and Materials Mgmt

The longer term: 2

• Integrate supply chain for forecasting and meeting materials and services needs • Optimize supply decisions based on historical and projected usage

Work Planning

• Decrease planning times by using the ‘library’ of job plans • Plan ahead for safety and environmental permits

Life-Cycle Cost Analysis

• Track costs by component or system, and by type of cost • Analyze costs for use in management decisions (e.g., repair vs. replace, purchasing, budgeting) www.ipamc.org Ben Stevens, OMDEC – “CMMS and EAMs” 52

Summary
• 1. The CMMS tool is just that – a tool • 2. It will work for you if….
– – – – – – –

You select the right objectives and targets Define the job correctly Break it down into its component parts Use the tool skilfully Measure and track the benefits Analyse and feedback the results Reward success
www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 53

Thank you for your attention
• Any questions…. • >>> email me ---- ben@ omdec.com

www.ipamc.org
Ben Stevens, OMDEC – “CMMS and EAMs” 54


				
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