Asset Information Management – A CALM …...ARC Collaborative Asset Lifecycle Management Model...

ARC WHITE PAPER
By ARC Advisory Group

FEBRUARY 2004

Asset Information Management – A CALM Prerequisite

Executive Overview ..................................................................3

Assets are the Heart of Manufacturing Enterprises.........................4

Asset Management Demands Its Own CMM Model .........................5

Asset Information Management (AIM) is the Backbone of CALM ......7

NRX – Addressing the I&C Layer............................................... 11

Conclusions ........................................................................... 13

THOUGHT LEADERS FOR MANUFACTURING & SUPPLY CHAIN

ARC White Paper • February 2004

ARC Collaborative Asset Lifecycle Management (CALM) Model

AIM – Asset Information Management

2 • Copyright © ARC Advisory Group • ARCweb.com


Executive Overview

Assets are the lifeblood of capital-intensive industries and Return-on-Assets (ROA) is the key measure of performance. Maximizing ROA is a key chal-lenge facing asset owners today.

Availability and maintenance costs are key drivers of ROA and are sup-posed to be controllable. But do most companies actually have these issues under control? Coping with unplanned work stoppages, long times-to-repair, and spiraling parts inventory costs appear to be more the rule than the exception.

Gaining control of assets is clearly challenging. Any-one who has spent time in a manufacturing plant recognizes that there are thousands of assets that must be managed and each can be mission critical. Keeping facilities operational is a daily struggle for operating and maintenance personnel. High asset availability demands rapid, accurate decision-making. Doing this with limited resources and tight budgets requires op-timal allocation of maintenance resources and parts to the most critical assets.

Assets are the lifeblood of capital-

intensive industries and Return-on-

Assets (ROA) is the key measure of

performance. Maximizing ROA is a

key challenge facing asset owners

today.

…

Asset information is a key enabler of

high ROA and better management

of this information is the main

priority in gaining control of assets.

Asset information is a key enabler of high ROA and better management of this information is the main pri-ority in gaining control of assets. Information that is

comprehensive, accurate and immediately accessible enables people to make decisions faster and more accurately, leading to higher availability and lower maintenance costs. Gaps in asset information, out of date or wrong information, or the inability to rapidly access necessary information wastes time and money and reduces ROA. Gaining control of asset infor-mation is therefore the main priority in gaining control of assets.

Asset information is itself complex to manage. Asset information is created by many organizations, in many forms, during all stages of a typical asset’s lifecycle. Information is likewise used by a diverse set of people and sys-tems, each with their own specific needs and requirements. Bringing all of the disparate information together into one, asset-centric, source of truth that is accessible to all parties is vital. In this way, information is then avail-able to be used by a diverse set of people and systems, each with their own

Copyright © ARC Advisory Group • ARCweb.com • 3


specific needs and requirements. As asset information is created through-out all stages of a typical asset’s lifecycle, managing the flow and accuracy of information is critical to managing the asset’s availability and reliability.

This report presents a model for Asset Information Management (AIM) that can be used to gain control of asset information. AIM is comprehensive and identifies all sources and uses of asset information. It also defines the role of individual enterprise solutions in creating, maintaining and dis-seminating asset information across the organization.

Assets are the Heart of Manufacturing Enterprises

Capital investments in assets are staggering. Manufacturers in process in-dustries such as Oil & Gas, Chemicals, Power, Metals, Pulp & Paper, and Food & Beverage have billions of dollars invested in hundreds of plants around the world. Discrete manufacturers of automobiles, semiconductors, aerospace, and electronics can be equally asset intensive. Over 65 percent of manufacturing investments are in production infrastructure that directly

affects their ability to generate revenue. Keeping these “mis-sion critical” assets operating is serious business. Even a minor percent of improve-ment in performance can spell the difference between a suc-cessful company with an acceptable Return on Assets and a company abandoned by investors.

Assets are the heart of manu-facturing supply chains. ARC’s Collaborative Manu-facturing Management (CMM) model illustrates this

key role. CMM describes a manufacturing enterprise as the intersection of three domains. In the Value Chain Domain, the enterprise generates reve-

Suppliers

Design

Support

Business

Customers

Production

Capital Assets are the Heart

of Manufacturing

Operations

Capital Assets are the Heart

of Manufacturing

Operations

Lifecycle Domain

Value Chain Domain

Enterprise Domain

ARC Collaborative Manufacturing Management Model (CMM)



nues and consumes the bulk of the organization’s resources. Business processes are focused on sourcing materials from suppliers, converting them into finished products and distributing these products to customers. Processes in the Lifecycle Domain support the value chain with new prod-uct designs and after-market service for products that have been sold. Enterprise Domain processes provide managerial control over the entire enterprise. This control goes from the top floor where financial measures rule to the shop floor where control is exercised through automation and operating procedures.

All domains intersect at manufacturing. This reflects the fact that all busi-ness processes must be synchronized in order to produce a product. In asset-intensive enterprises, manufacturing’s role is even greater. Assets are generally owned by the enterprise and must be operated continuously to cover the investment. For asset owners, maximizing the life and efficient utilization of these assets becomes the driving force for all domain activities and ROA becomes the key measure of enterprise performance.

Asset Management Demands Its Own CMM Model

Manufacturing assets are complex

and expensive with multi-stage

lifecycles

…

Achieving maximum ROA requires

use of Best Practices for every

activity, across all of these stages.

Manufacturing assets are complex and expensive with multi-stage lifecycles. They begin as simple concepts to address an organization’s needs and rapidly become physical entities that must be ac-quired, installed and handed-over to operating departments for use in generating revenues. Dur-ing operation they must be carefully maintained to get maximum performance and longevity. Eventu-ally they become obsolete and must be retired.

Achieving maximum ROA requires use of Best Practices for every activity, across all of these stages.

ARC’s Collaborative Asset Lifecycle Model (CALM) captures the complex-ity of asset management in a second, interrelated CMM model. Again there are three domains focused on lifecycle, value generation and man-agement. However, in CALM the focus of these activities is on the creation, use and management of the manufacturing assets themselves, not the



enterprise’s final products. The concept is the same as CMM but the focus is on op-timizing the performance of assets.

In the CALM model, the Asset Lifecycle Domain captures the processes related to asset crea-tion, improvement and retirement. It includes key processes like design, manu-facture, installation and decommissioning of complex facilities. The primary stake-

)
ARC Collaborative Asset Lifecycle Management Model (CALM
holders in this domain are the asset owner and their Engineer, Procure and Construct (EPC) contractor. Once assets have been installed, they are op-erated and maintained by the respective groups in the owner/operator’s organization. The Asset Operation Domain recognizes that operations con-sumes an asset’s capabilities and these are restored periodically with parts and services acquired from the Original Equipment Manufacturers (OEM). The Asset Performance Management Domain includes those processes that occur during operation to monitor an asset’s condition and manage the per-formance of the asset and the maintenance processes. Key players in this domain are the condition monitoring systems, the maintenance and techni-cal staff and management.

Asset management is at the heart of CALM. This is a collaborative activity which includes the maintenance technicians, engineers and operators charged with the care and improvement of the manufacturing assets. And these stakeholders depend upon a reliable service network of service and parts providers.

ARC’s complete CALM model has been described in other reports and represents a strategy for developing an effective asset management pro-gram. Using the structure described above, the business processes in each domain have been analyzed and Best Practices identified for each process. Asset Information Management (AIM) is a CALM Best Practice that under-lies all the business processes in each domain.



Asset Information Management (AIM) is the Backbone of CALM

Information is created and consumed by every process in the CALM model. Management of this information is vital to efficient and effective asset man-agement and thus to the eventual ROA of the investment.

Asset information is created by a variety of stakeholders throughout an as-set’s lifecycle. Other stakeholders use that information to perform their activities in the same or subsequent lifecycle stages. Best Practice solutions have been developed for various combinations of stakeholders and lifecycle stages. ARC’s Asset Information Management (AIM) model defines the roles and responsibilities of these individual solutions in achieving a com-plete, integrated solution.

The Primary AIM Applications

Computer Aided Design (CAD) and Document Management Systems (DMS) are Best Practice information management solutions for asset crea-tion. Leading suppliers of CAD solutions include Intergraph, PTC and EDS. Documentum is an example of a Document Management System. EPC’s use CAD to create equipment designs, instrument diagrams, P&ID diagrams, bills of materials, construction drawings, etc. DMS systems are

then used to manage the dissemination of this in-formation to myriad OEMs and contractors involved in the overall project.

Enterprise Asset Man-agement (EAM) and Plant Asset Management (PAM) are the Best Prac-tices for asset information

management during the Operate/Maintain life-
Asset Information Management – AIM
cycle stages. EAM systems maintain asset information in hierarchies that support maintenance and spare parts planning and execution for individual systems and subsystems. EAM also maintains a history of all asset mainte-



nance to enable performance management. Leading suppliers of EAM sys-tems include SAP, Indus, MRO Software, Datastream, IFS, Peoplesoft, etc. PAM solutions, which are often part of the automation systems, support on-line condition monitoring and evaluation of an asset’s health. Compa-nies providing PAM solutions include Emerson, ABB, Honeywell and Rockwell.

OEMs provide the basic components in the facility and play a critical role in asset information management through their instruction books, parts lists, catalogs, etc. During operation, the ability to rapidly identify parts is criti-cal and Best Practices in this area include electronic catalogs and “active” instruction books that contain “hot spots” for ordering parts directly from drawings, etc. Enigma’s 3C product is an example of a smart catalog solu-tion. Product Service Management (PSM) solutions also play a role in AIM for OEMs. These systems support the OEMs customers through interfaces that facilitate service requests, product information, etc. Depending upon the service agreement, these systems may also support histories of service calls, repairs, etc. Suppliers of PSM systems include Siebel, SAP, People-soft, Astea and Metrix.

AIM in the Ideal World

The key applications in AIM are all Best Practices in their own domain. But, despite the grandiose visions of some suppliers, no single one will ever become a complete AIM solution. The technologies and focus of the differ-ent systems are simply too different. Integration of applications is and will always be a key requirement for a complete AIM solution. It is therefore important to establish the role for each solution.

In the ideal world, the role of individual applications is clear. EPCs would use their CAD and DMS systems to design the facility and the information would be in a form that facilitates extraction of the basic information re-quired by the EAM system. This would include a structured asset hierarchy with all assets grouped appropriately into systems, subsystems, components, etc. and with links pre-established to all drawing trees, etc. A separate Bill of Material would likewise be extracted as the basis for manag-ing spare parts inventories. The Bill of Material would have links to the drawings, the OEM’s catalogs and the EAM asset hierarchy. OEM’s would likewise be using an electronic parts catalog that fully supports all past and present products and all advanced functionality.



The EAM system would use the downloaded information for developing proper maintenance programs, planning maintenance activities, and would maintain its own record of all work done on the asset. This information would be linked back into the CAD system so that anyone looking at a drawing would have immediate access to the service history and all modi-fications that have occurred. OEMs could likewise have access to the service history to evaluate recurring problems and to help the asset owner improve system reliability.

The EAM system would also be connected in real-time with the PAM sys-tem. The PAM system would periodically evaluate the condition of each asset and notify the EAM system of pending problems and the need for maintenance support. Service people would then be able to access the PAM application in order to troubleshoot the problems. The status of work or-ders would also be continuously shared and PAM would be responsible for notifying operators and initiating specific control actions, like shutdown procedures.

Integration in the ideal world would also be extremely straightforward. All applications would use a common data model, be open and use exposed web services to support other users. Integration would happen seamlessly between all applications, based solely on hyperlinks associated with indi-vidual assets.

The Real World of AIM

The real world of asset management is certainly more challenging than the ideal. Manufacturers already have existing assets with only paper docu-mentation that may or may not be accurate since they have been maintained for years using only manual systems. Warehouses already have spare parts, many of which may be obsolete or redundant because they have been stored under different codes for the same parts. At a mini-mum the parts documentation is out of date with the supplier’s new numbering systems and product changes. Documentation that is already in electronic form is in a variety of incompatible formats and lacks any struc-tured information that could be used to make it actionable. AIM applications that do exist are neither open nor easy to integrate with other applications.

History cannot be changed and this is particularly true with asset manage-ment. AIM recognizes this fact by identifying an additional software layer:



the Integration and Collaboration layer (I&C). Software in this layer fills the voids between the ideal and the real world. In particular, we assume that the manufacturer will have the full functionality of a modern EAM sys-tem (this is easily rectified if they do not) and the role of the I&C layer is to make the outside world appear ideal to EAM. True efficiency demands that the EAM system operates with complete information and the I&C layer becomes the company’s investment in efficiency.

Information voids will naturally vary across manufacturers and there is no way to define the full range of functionality that may be required in the I&C layer. But we can identify key gaps that would be addressed through AIM I&C components, namely:

• Asset Data Management – Processes and solutions that create ac-tionable, structured, electronic content for existing assets. These solutions should fill the voids left by the lack of initial CAD draw-ings as well as any gaps with OEM catalogs.

• System Collaboration – Processes and solutions that integrate EAM with the rest of the AIM community. These components would address both sides of the layer – making EAM open to the outside world and making the outside world open to EAM.

The AIM I&C Layer is not Temporary

The AIM I&C layer should not be viewed as a temporary “patch” to fill a gap until everything is ideal. There will always be a need for the I&C layer. This is not simply a case of enterprise application integration that

will be resolved when everyone upgrades their software to sup-port web services.

The world of capi-tal asset management will never be ideal. Capital Assets are built to last for a long time and sys-

r

10 • Copyright © ARC Ad

AIM’s Integration & Collaboration (I&C) Laye

visory Group • ARCweb.com


tems will have to support documentation formats across decades. No one is ever going to replace a plant just because the documentation is in a for-mat that is incompatible with some new system. There will always be a need to convert documentation in one form (like paper) into a new form (electronic) and to augment information to enable new functionality.

I&C solutions will have a long life. Investments made in the I&C layer will bring returns in asset management effectiveness for many years.

NRX – Addressing the I&C Layer

While there are many companies developing solutions for CAD, EAM, PAM and Catalogs, few companies are addressing the very challenging is-sues in the AIM I&C layer. NRX has a solution that addresses key gaps. Their “Collaborative EAM” solution is focused specifically on filling the voids in existing solutions. They address those areas that others find too challenging with novel approaches that promote efficiency and effective-ness. NRX enables asset owners to take control of their assets and achieve superior ROA by eliminating application and information silos to ensure that required asset information is accessible and leveraged across the or-ganization. The right information delivered to the right user at the right time serves as the basis for intelligent decisions.
NRX’s Collaborative EAM Solution enables the I&C Layer


NRX has developed technology that is specifically aimed at eliminating application silos to ensure that required information value is maximized and leveraged across the organization. The NRX Collaborative EAM solu-tion leverages these advancements by delivering a solution that incorporates three primary core components, including:

(i) Packaged Composite Application – VIP™ VIP is NRX’s Packaged Composite Application (PCA) that lever-ages an organization’s investment in existing enterprise and plant applications by linking people and processes to applications and information. Packaged Composite Application refers to a form of application software that uses existing enterprise applications and technology as a foundation. PCAs can create new applications and integrate existing applications to collectively enable a company’s business processes. PCAs are ideally suited for asset management where cross-silo business processes and applications involve mul-tiple roles and functional areas. VIP enhances and extends plant applications usability and functionality by providing users with a single point of access to a collaborative, transactional workspace.

(ii) Enterprise Services Architecture Enterprise Services Architecture (ESA) is a comprehensive integra-tion and application platform, which gathers information from multiple applications and presents it in a unified, homogeneous form. ESA allows applications to present their services for use in PCAs (such as VIP). ESA provides a powerful, standards compli-ant integration and application platform that fully supports web services technology making it possible for organizations to quickly enable adaptive business processes using PCAs. A number of ESA platforms are available including SAP NetWeaver, IBM Web-sphere, and others.

(iii) Asset Data Management Engine – ACM™ ACM, NRX’s powerful Asset Data Management (ADM) engine, provides asset owners with rapid access to large quantities of comprehensive and accurate asset information to improve the quality and speed of day-to-day work execution. EAM applica-tions benefit from an ADM engine’s ability to unify information from diverse sources and deliver the information to the user in a relevant workflow context. An ADM engine is required to pro-vide the backbone of data, content, and Bill of Material



information to support the Operate/Maintain stage of the asset lifecycle management process. With ACM, data is verified and content structured, so that it can be converted into transactional information. This information is then accessed and delivered di-rectly to users in the context of their day-to-day work. Information that is delivered to the right user at the right time serves as the basis for intelligent business decision-making.

VIP is built on the ESA platform and powered by the ACM asset data man-agement engine. It is delivered as out-of-the-box functionality with pre-packaged EAM integration and data synchronization. By eliminating the need for custom development, Total Cost of Ownership (TCO) and the cost to create and maintain EAM master asset data on an on-going basis are re-duced.

The NRX Collaborative EAM solution provides the technology infrastruc-ture, tools, and methodologies to improve work management and supply chain productivity. Linking people and processes to applications and in-formation generates Business Process Improvement and productivity gains that drive ROA.

Conclusions

Whether manufacturer or service provider, owners of expensive assets are facing challenging times. Survival demands that they adopt new strategies that can help them reduce costs, improve service and separate themselves from the crowd. Better asset management offers tremendous opportunities for improved ROA and should top the list of improvement programs.

Gaining control of assets is challenging under the best of circumstances. Organizations must have constant knowledge of what assets they have, how they are being deployed, and their operating condition in order to get maximum return from these expensive investments. Asset Information Management (AIM) must be a central concern and must be done right. Lack of information or the inability to access it rapidly should no longer be tolerated.

AIM solutions cover a broad range of functionality. Each has a specific role and incorporates Best Practices appropriate to that role. But there will



never be one solution that fills all AIM needs. The issues are too different and demand specialized focus. Integration & Collaboration (I&C) is a per-manent element of any complete AIM solution. Considering this fact allows you to recognize solutions that can help you fill voids in information and functionality today as permanent components in your long term strat-egy. Striving for an ideal system is admirable but impractical given the real world of capital asset management.

NRX recognizes the importance of the I&C layer and has developed a Col-laborative EAM solution that addresses some of the most critical and challenging voids in AIM components. Their solutions provide a means for you to implement an effective asset management program today that will give you real control over your assets and help you achieve your ROA goals.



Analyst: Sid Snitkin

Acronym Reference: For a complete list of industry acronyms, refer to our web page at www.arcweb.com/Community/terms/terms.htm

ADM Asset Data Management

AIM Asset Information Management

BOM Bill of Material

CAD Computer-Aided Design

CAGR Compound Annual Growth Rate

CALM Collaborative Asset Lifecycle

Management

CAS Collaborative Automation System

CMM Collaborative Manufacturing

Management

CPAS Collaborative Process Automation

System CPM Collaborative Production

Management

CRM Customer Relationship

Management

DMS Document Management System

EAI Enterprise Application Integration

EAM Enterprise Asset Management

EPC Engineer, Procure, Construct

ERP Enterprise Resource Planning

ESA Enterprise Services Architecture

I&C Integration & Collaboration

IT Information Technology

MIS Management Information System

MRP Materials Resource Planning

OEM Original Equipment Manufacturer

OpX Operational Excellence

P&ID Piping & Instrumentation Draw-

ing

PAM Plant Asset Management

PAS Process Automation System

PCA Packaged Composite Application

PLC Programmable Logic Controller

PLM Product Lifecycle Management

PSM Product Service Management

ROA Return on Assets

ROI Return on Investment

RPM Real-time Performance

Management

SCE Supply Chain Execution

TCO Total Cost of Ownership

Founded in 1986, ARC Advisory Group has grown to become the Thought Leader in Manufacturing and Supply Chain solutions. For even your most complex business issues, our analysts have the expert industry knowledge and firsthand experience to help you find the best answer. We focus on simple, yet critical goals: improving your return on assets, operational performance, total cost of ownership, project time-to-benefit, and shareholder value.

All information in this report is proprietary to and copyrighted by ARC. No part of it may be reproduced without prior permission from ARC. This research has been sponsored in part by [Name of Client]. However, the opinions expressed by ARC in this paper are based on ARC's independent analysis.

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Asset Information Management – A CALM …...ARC Collaborative Asset Lifecycle Management Model...

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