- Dr. Luis (Luigi) Amendola, PhD.
- Articles
- Asset management, Digital transformation, Innovation, Operational Excellence
SUMMARY
Over the years, the technological reality in the field of asset maintenance management has evolved from merely addressing the Maintenance stage toward the comprehensive administration of the asset life cycle; these are known as Enterprise Asset Management (EAM) – CMMS (Computerized Maintenance Management System). EAM-CMMS systems allow for proper management of physical assets. For more than a decade, EAM-CMMS have been evolving as companies have discovered the need and true value of having an integrated view of their physical asset portfolio. This involves achieving efficient use of resources at the operations level (own and third-party), efficient management of all stages of their life cycle, contractor evaluation, management of costs associated with operation and maintenance activities, and reliable management of the main technical-economic indicators associated with physical asset management. The goal is to achieve optimal activity planning throughout the entire asset life cycle and resource provisioning based on data rather than assumptions. In this sense, the need and importance of having reliable, available, and updated data are aimed at supporting timely decision-making. Given this approach, questions often arise during my consultancies in more than 25 countries for companies in different sectors wishing to evolve their asset management: How do we know if we are fully using the EAM-CMMS? How do we know if we have the right EAM-CMMS? How do we know which EAM-CMMS fits our needs? How do we know if we require an EAM-CMMS? How do we know if we are selecting the most suitable EAM-CMMS? Are we getting the most out of our systems? In this regard, these articles present the requirements and critical aspects that every company must fulfill to achieve Optimized Asset Maintenance Management aligned with ISO 55001 supported by information technology, and how organizations can capitalize on the use of its functions.
Keywords: Capex; Opex; Profitability; Costs; Investment
1. INTRODUCTION
For more than a decade, EAM-CMMS have been evolving as companies have discovered the need and true value of having an integrated view of their asset portfolio. This involves achieving efficient use of resources at the operational level (own and third-party), efficient management of all stages of their life cycle, contractor evaluation, management of costs associated with operation and maintenance activities, and reliable management of the main technical-economic indicators associated with asset maintenance management. The goal is to achieve optimal planning of maintenance activities and resource provisioning based on data rather than assumptions.
In this sense, the need and importance of having reliable, available, and updated data are aimed at supporting timely decision-making. Therefore, it is of great importance to have an EAM-CMMS for Asset Maintenance Management. Given this approach, questions often arise in companies wishing to evolve their asset management: How do we know if we have the right EAM-CMMS? How do we know which EAM-CMMS fits our needs? How do we know if we require an EAM-CMMS? How do we know if we are selecting the most suitable EAM-CMMS? Are we getting the most out of our system? It is necessary for the industry to know how to identify the relevant aspects for their business regarding the use of an EAM-CMMS and the relevant points that will generate value with its implementation.
The ISO 55001 standard, as a guide for best practices for optimal physical asset management, advocates for a robust and optimal asset management system that ensures asset knowledge and reliable, timely information are preserved. For ISO 55001, this represents an important aspect evidenced in its requirements 7.5 and 7.6, Required Information and Documented Information [1].
In this article, based on my experience, the objective is to show what an EAM-CMMS really is.
2. THEORETICAL FRAMEWORK
It is important to consider several relevant aspects regarding EAM-CMMS.
1. What is an EAM (Enterprise Asset Management)?
An Enterprise Asset Management system, commonly called EAM, provides companies with a real-time work tool for managing the entire asset life cycle and analyzing highly valuable operational information. The analytical capacity for decision-making is broad, and information can be analyzed under different criteria, whether for a specific purpose of each department related to asset operation and maintenance, or for an integrated purpose of operational efficiency and financial results of their management.
2. The main features of an EAM system are:
- Provides functionality to manage the entire asset life cycle (Design, Acquire, Implement, Maintain, Operate, Retire, and Residual Commitments).
- Integration with enterprise, accounting, financial, human resources, operational systems, and any other system that exchanges asset data.
- Provides a backup database for compliance with operational, safety, and environmental regulations.
- Allows for Financial and Asset Cost Management (maintenance, spare parts, contracts, personnel, indirect costs, external services, transfers, tools, overhauls, replacements, etc.).
- Provides tools for planning, scheduling, and recording the execution of corrective, preventive, and predictive maintenance.
- Provides functionality for monitoring operations to have respective alerts for operating parameters that are out of range, serving as a basis for condition-based maintenance and reliability.
- Assists in short- and long-term decision-making through the use of management indicators and tools for statistical analysis of asset behavior.
3. The fundamentals of CMMS (Computerized Maintenance Management System)
A Computerized Maintenance Management System (CMMS) is software used to track and maintain assets and resources within an organization’s maintenance unit. It allows users to monitor and record any and all maintenance work while maintaining a historical record of the work performed and tracking critical asset information for future reference.
4. Using a CMMS
One of the main strengths of a CMMS is that it is a proactive and dedicated asset management tool. It can manage all reactive, preventive, predictive, and reliability maintenance activities.
Most CMMS solutions also offer advanced inventory management features, ensuring that all spare parts and stock items are available for repairs and service. Running costs are lower and offer a faster ROI through improved efficiency, reduced asset downtime, and increased asset life expectancy.
Modern CMMS are easy to implement, and technicians can pick them up quite quickly. They save all critical asset information and allow you to use advanced reporting features to improve your asset management decisions, such as IIoT, Big Data, and Artificial Intelligence. They provide an integrated asset knowledge base with functionality to store all types of information and documents, from asset technical sheets, location structures, maintenance documents, supplier manuals, blueprints, quotes, purchase documents, images, photos, etc. This helps, according to the Integrated Asset Management model (Amendola, 1997, 2019), to preserve knowledge about assets.
Figure 2. Asset Management Reliability Implementation Methodology, (Amendola. L, 1996, 2019 © Copyright PMM)
For company operations today, the monthly time horizon of financial statements is too long for taking corrective or preventive measures and does not allow for efficiency and competitiveness. For this reason, traceability and more information from business operation areas such as maintenance, logistics, operations, etc., are required to achieve better analysis of variables that impact business profitability.
To achieve visibility and control company expenses, traceability of the main areas generating these expenses is required; in industrial companies, the main expense-generating areas are operations and maintenance. How can expenses be controlled without an operational and maintenance analysis tool? How can decisions be made in this regard if information is not available regarding both the history of how work has been done and the results obtained, as well as the planning of what is to be done? In the same way that system implementation gives us visibility into the main revenue areas of the company (commercial systems) and expenditure areas (logistics systems), having all jobs and the “how” of execution recorded in the maintenance area allows us to see if we are performing work efficiently and will obtain the desired results.
The development of systems for operational and production areas of companies was due to two main needs: expense control in physical assets (maintenance) and production control (production plans).
5. The Maintenance and Asset Management Function
The maintenance and asset management function is not and has never been part of the ERP methodology, considering that the main focus is production control; however, asset management is a key control area that has significant impacts on production.
ERP systems, since their conception, were born oriented toward manufacturing industries; therefore, their foundations are not oriented toward their main functions performing maintenance management, let alone integrated asset management. Thus, for asset-intensive companies, ERP functions are insufficient to manage their main business focus. These companies have a high dependency on the availability and best use of their assets, making the asset management function a strategic implication for achieving competitive advantages.
For this reason, they need to complement their management with an EAM-CMMS system that interacts directly with the ERP to achieve a vision and analysis of all strategic control areas of the company.
6. What is the industry’s need for an EAM (Enterprise Asset Management) – CMMS (Computerized Maintenance Management System) in Asset Management?
The way to be efficient in industries is to be able to control costs; for this, it is important to know the key areas that impact costs. Maintenance is a significant cost in industries; depending on the type of industry, it can represent 30% to 45% of the total cost, making it a great opportunity to seek efficiency and better financial results. Likewise, an increase in asset availability means an increase in production capacity, thereby allowing for better production planning.
Among the main challenges currently facing asset management, we can point out:
- Automation: today, the most secure and optimal way to handle information in different areas. New assets bring new technology and exportable local data storage for analysis that needs to be leveraged and exploited for asset knowledge management.
- Complexity: along with the quantity and diversity of assets a company has, stricter policies and regulations for asset operation, safety, environmental protection, and health are being defined for all industries. All this makes asset management demand a large amount of information from various aspects.
- Knowledge: for years, knowledge of asset operation and maintenance has been concentrated in individuals; however, this knowledge is not always transmitted from one person to another. An integrated asset management system becomes a great knowledge base and history for them.
Among the most common questions and needs companies have when seeking greater operational efficiency are:
- How to reduce operational costs?
- What type of organization and processes should I have to manage my assets?
- Which functions should I outsource?
- What information should I generate for my asset analysis and how?
- How should I operate and maintain assets to optimize quality?
These and other questions arise because asset management requires a cultural change. In operational areas, we are used to keeping records of everything, whether manual or automated; there has always been a huge amount of information captured, documented, and audited, but it is not analyzed holistically. There is no culture of analyzing information in an integrated manner. Analysis in operational areas is mostly limited to reviewing failure statistics, typical operating parameters, and resulting costs.
Some management deficiencies found in maintenance areas are:
- Commonly, Work Orders are managed rather than Assets; a complete record of all maintenance work is kept and the equipment history is updated, but there is no analysis of whether the maintenance plan is yielding good results for the asset’s useful life.
- CMMS/GMAO or EAM systems are underutilized; only an average of 30% of total functionality is used, focused mainly on WOs and Costs, without having complete information on resource control, material control, resource planning based on maintenance plans, etc.
- A system was implemented but no cultural change took place; analysts and planners spend 70% of their time recording information that, because it is not analyzed, provides no real benefit to the company—information that, with good analysis practices and a change in the way of working, becomes decisive for decision-making and the required improvement in operational efficiency.
- A system was implemented that lacks the capacity for management analysis and monitoring; the work required to obtain information and the analysis scenarios of the
system are poor, so a lot of time is invested in processing information and issuing management reports.
4. EAM or CMMS RECOMMENDATIONS
1. Benefits of CMMS software
CMMS software simplifies maintenance processes by storing all data in a digital format, with IIoT support. It gives you access to comprehensive data, and work orders can be sent as soon as problems are found. Preventive and predictive maintenance jobs can be scheduled in advance with set trigger reminders, ensuring you have enough time to complete the work before the deadline. Equipment service history, along with reports, gives you the information you need to make smarter long-term business decisions. You will be able to access your CMMS from mobile devices and IIoT, ensuring that important details are recorded immediately. This saves time that would otherwise be spent at a computer at the end of the day.
Figure 3. CMMS integration with IIoT solutions, Adapted by Amendola. L, 2020.
2. Benefits of EAM software
EAM software provides and analyzes data for your asset performance (e.g., energy consumption and asset depreciation) to help you make informed budget decisions. It is designed to provide useful data to departments other than maintenance, as it tracks asset costs and sources as well as equipment specifications. It also maintains records on how assets were built and from which supplier or manufacturer they were acquired. Many EAM systems closely monitor equipment conditions to ensure organizations comply with health and safety regulations. Enterprise asset management software also features asset life cycle management that helps plan asset upgrades and replacements based on where they are in their life cycle.
Figure 4. EAM integration with different solutions, Amendola. L, 2017.
3. Recommendations
When it comes to EAM software, it is usually for very large, asset-intensive companies because they have broader capabilities. If your needs are primarily based in the maintenance and operations department, CMMS software will likely serve you well and fit a smaller budget. It is important to weigh your options, as prices for each type of software vary.
In short, it all comes down to what you want your software to achieve. If your needs focus on maintenance and operations, a CMMS will be a better fit. If your needs focus on asset-intensive companies as a whole, you may choose EAM software. Once you decide which of these benefits (and more) are most important to you, you can determine which type of software might be best by performing an ROI (Return on Investment) calculation.
5. REFERENCES
[1] ISO 55001-2014, Asset Management
[2] ISO 55002-2018, Asset Management
[3] Amendola, L. Gestión Integral de Activos Físicos. ISBN: 978-84-935668-8-3, PMM Institute for Learning Editorial. (2015).
[4] Managing an Enterprise Asset Management – Lawson USA 2009
[5] CMMS: A Timesaving Implementation Process – Daryl Mather 2006
[6] Enterprise Asset Management – Infor EAM – 2009
[7] Maximize your EAM solution – David Berger – WMC Canada
[8] EAM Survey – Plan Services Magazine – USA
