Asset Management Solutions - REQUEST: please contribute to keep

Global Business Services

© Copyright IBM Corporation 2008

Real Estate and Facilities Plant and Production Mobile Assets Infrastructure Information Technology

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Asset Management Center of Excellenceamcoe

Asset Management Solutions

IBM®Professional Services

Supported By

"Using Asset Management Leading Practices to Create Your Organization’s Best Practices"

Richard van DongenService Manager EAM Maximo BeneluxMaximo Service Area Leader - SW IOT




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Material Table of ContentsMaterial Table of Contents

� Key Trends in Industry

� Visibility issues and strategy

� How to use Enterprise Asset Management to make Assets Visible

� Control: asset management opportunities

� How Enterprise Asset Management helps you control processes that impact your asset performance

� Automation: it’s critical to have efficient asset performance

� How Enterprise Asset Management supports automation of strategic maintenance management

� Some Success Stories

� Summary

� Q&A

Real Estate and Facilities

Plant and Production

Mobile Assets

Infrastructure

Information Technology




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Leading Practices vs. Best PracticesThe Big Picture




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In Response to these Trends…• Increased automation

• More complex silos of technology

• Aging workforce

• “Best of breed” vs. “one stop shop”

• Greater emphasis on “green” and Corporate Social Responsibility

• Increased complexity meaning Increased risk with more serious consequences

• Greater pressure to do more with less

How do I…• Get alignment, from plant eng & maintenance,

to customer?

• Integrate technology to keep it simple?

• Use IT for knowledge transfer?

• Ensure ease of implementation & upgrade, maximum flexibility, and best fit with needs?

• Better monitor asset sustainability for lower costs & improved brand?

• Improve planning, tracking, and control systems to minimize damage and prevent re-occurrence?

• Develop a strategy, measure, benchmark best practices, and take action?

Need to ChangeNeed to Change StrategyStrategy MeasureMeasure InitiativesInitiatives Behavior ChangeBehavior Change




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The Need for Change:Today’s Big Challenges

and Opportunities




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EAM Challenges/OpportunitiesEAM Challenges/Opportunities

� What are the challenges and opportunities regarding enterprise asset management?

� How do you get the attention of top management, and change the behavior of the front line, to deal with these challenges and exploit these opportunities?





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Getting BuyGetting Buy --in: What Gets in: What Gets Senior ManagementSenior Management Attention?Attention?Link enterprise asset management to profitability management as follows:

Profitability = profit / net assets

= profit x sales sales net assets

= profit margin x capital turnover

This link can more easily be accomplished through a more strategic approach to managing assets.





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Getting BuyGetting Buy --in: What Changes in: What Changes Front LineFront Line Behavior?Behavior?

� Leadership- Clear vision and plan- Consistency over the long term- Support through action- Realistic performance measures & targets that define success- Recognition, rewards & consequences aligned with success

� Knowing “what’s in it for me?” for each stakeholder, and managing expectations

� Clarity of roles and responsibilities

� Constant and meaningful two-way communication

� FLEXIBILITY – Things Will Change!





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The Need for Change:Technical versusStrategic Change




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Technology

Processes

Strategy

Organizational Design

Measurement

Change Management

Primary Tools (e.g., Lean, Six Sigma, RCM, PdM)

CUSTOMER

Service Price Quality

Key Differentiators(e.g., Human Performance Factor)

TechnicalChange

StrategicChange

Move from Technical Change to Strategic ChangeMove from Technical Change to Strategic Change





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It Takes a Team with a StrategyIt Takes a Team with a Strategy …………....

� 80% of your improvements will be related to Process + Organization .

� Technology itself is not the solution.

� Maintenance of IT enabled assets is no longer just the job of IT staff.

� If the Business processes never change then the heavy reliance on the new software implementation simply glosses over (or automates) existing problems. Never assume the improvement process will manage itself.

“ If you do what you always do, you will get what you always get.”




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Where Promises meet RealityWhere Promises meet RealityTechnology DOES:

� Create agility

� Leverage process improvements across all asset classes

� Reduce total cost of ownership:

• single interface

• single set of skills

• consistent employee interface


Technology DOES NOT:

� Automatically fix all your problems.

� In itself define a Best Practice

� Provide information in lieu of data

�Change behavior




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An Opportunity for ImprovementAn Opportunity for Improvement

� Supporting Systems- Numerous “niche” systems

- Excessive overlap

- Difficult to manage data

- Limited agility

� Business Processes- Fragmented

- Limited standardization

- Limited alignment with business goals

OPERATIONALASSETS

ITASSETS





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Strategic Asset and Service ManagementStrategic Asset and Service Management

� Supporting Systems- Rational suite

- Architecturally modern

- High degree of agility

� Business Processes• Single set, supporting

business and IT operations

• Aligned with business goals

• Standardized

ASSETS





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� Asset Management is a business discipline related to managing an enterprise’s assets over their lifecycle from design, build, procurement, operation, maintenance, modification and disposal. This not only includes the assets, but the inventory and human resources associated with maintaining them. Assets can be in classes such as Real Estate and Facilities, Plant and Production Equipment, Mobile/Fleet Assets, Infrastructures, and more recently IT equipment and networks.

� Assets Classes Include- Utilities... plants, pumps, generators, and substations…- Transportation organizations… crews, mixers, sub-contractors...- Fleet… trucks, buses, heavy equipment, rail cars…- Seaports… ships, cranes, platforms, and forklifts…- Airlines... planes, cargo handling equipment...- Facilities… buildings and grounds...- Healthcare... hospitals, health care equipment…- Pharmaceutical … FDA compliance mfg...- Defense... tanks, planes, ships…- IT … servers, workstations, software, help desk…

Real Estate & Facilities

Infrastructure

Mobile/Fleet

Plant and Production Information Technology





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Best in Class depends on Total Lifecycle Asset Mana gement Best in Class depends on Total Lifecycle Asset Mana gement

� Single platform for Enterprise Asset Management , IT Asset Management , and Service Management- Fully integrated real and personal property asset management solution- Extend asset life, improve asset performance, and improve mission readiness and availability- Reduce infrastructure cost and improve accountability and compliance- Utilize standard processes, definitions and tools providing economies of scale- Support emergence of pervasive devices (embedded chips, RFID, sensors, detectors, etc.)

Runways, Roads, Electric / Gas Distribution, Telecom, Water/Wastewater

AssetStrategy

Plan Evaluate and Design

Create / Procure

Operate Maintain Modify Dispose

Asset LifecycleTraditional

Asset Classes

Plant and Production

Real Estate and Facilities

Mobile and Fleet

Infrastructure

Installations, Buildings, Hangars, Warehouses, Schools, Hospitals, Gyms

Back Shop, Fuel Farms, Nuclear, Calibrated Equipment, Industrial Plant

Aircraft, Tanks, Ships, Airlines, Vehicles, Shipping, Weapons Systems

IT Equipment & Network PCs, Networks, Routers, Applications, Auto Discovery, Service Desk





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Eliminate Silos / Get Alignment: Common View of Cus tomerEliminate Silos / Get Alignment: Common View of Cus tomer

� Internal Customer Model – us/them or servant/master mentality

� Business Partner Model – shared goals but different roles

End Customer:- Service- Quality- Price

MktgLineOpns

Eng

Maint

Line Opns

Marketing

Internal Customer Model Business Partner Model

End Customer:- Service- Quality- Price

Engineering

Maint




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Shared VisionShared Vision

“If you don’t know where you’re going, any road will do.”

…. And you’d better be prepared to be satisfied wherever you end up!

The road to EAM starts with strategy; performance

measurement ensures you know when you’re there; var ious

technical tools help you develop a trouble-free rou te down the

shortest path; an SLA manages expectations along th e way.





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Where are you on the Enterprise Asset Management Where are you on the Enterprise Asset Management Continuum?Continuum?

• Inconsistent EAM Strategy; :Little or no Green• Limited Planning, Analysis & Measurement• Inefficient Processes; Unreliable Data• Poor Understanding of Risk

• Integrated EAM Strategy incl Green• Robust Planning & Measurement• Effective Automation; Accurate Data• Clear Risk Management Plan

EAM Industry





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Goals Objectives Performance MeasuresTargets(Year)

ActionItems

Baseline 1 2 3 - process-driventechnologychanges

- processchanges

- productchanges

- organizationalchanges

- financialchanges

CustomerSatisfaction

EmployeeSatisfaction

Operational Effectiveness

AssetIntegrity

Risk Mgt

Etc.

Building an EAM Strategy: The “One Pager”





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Measurement:Setting & Managing Expectations




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Goals Objectives Metrics/ Action PlansMeasures 0 1 2 3

Targets

STRATEGY

-training hrs/year

-safety lost time

People Management

-total cost of ownership

-performance

-reliability

-cost per unit of prodn

Equipment Lifecycle Management

-inventory turns

-service level

Parts Inventory Control

-equipment availability

-parts availability

Shutdown

etc.etc.etc.-machine downtime

-worker utilization

etc.Work Order

Management

60

99

50

95

40

90

-% planned work

-PM compliance

2.b.

3.c.

Maintenance

Planning

Stretch GoalRealisticMin/Max

S e r v i c e L e v e l sMeasures

ObjectiveReferences

Service

-training hrs/year

-safety lost time

People Management


-performance

-reliability



-inventory turns

-service level



-parts availability

Shutdown


-worker utilization

etc.Work Order

Management

60

99

50

95

40

90

-% planned work

-PM compliance

2.b.

3.c.

Maintenance

Planning

Stretch GoalRealisticMin/Max


ObjectiveReferences

Service Measures/ Baseline Expectations Target Design ActualDrivers

Cust. Sat.measure1measure2measure3

Emp. Sat.measure1measure2

Risk Mgmt.measure1measure2measure3

Productivitymeasure1measure2

Project Performance Measures & TargetsService Level Agreement

Business as Usual:“The best that we canbe today, consistently”

Projects:“Address the gap betweenwhere we are today vswhere we need to be”

baseline target

current service level =project baselineEAM

System EAM System

EAMSystem





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Service Level Agreement Provides a BaseService Level Agreement Provides a Base

*EAM system tracks plan vs actual

-training hrs/year

-safety lost time

People Management


-performance

-reliability



-inventory turns

-service level



-parts availability

Shutdown


-worker utilization

etc.Work Order

Management

60

99

50

95

40

90

-% planned work

-PM compliance

2.b.

3.c.

Maintenance

Planning

Stretch Goal*Realistic*Min/Max*


Objective

ReferencesService





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SLA: Setting Expectations for Baseline Performance MeasuresSLA: Setting Expectations for Baseline Performance Measures

MATERIALS MANAGEMENT� Vendor performance� Supplier pricing� For ABC classifications: Service level vs Inventory

level/turns� Obsolescence� Procurement cost (per order/unit): Rush orders,

blanket PO’s, e-procurement

ASSETS = EQUIPMENT/FACILITIES� Availability (vs machine downtime)� Utilization (vs available but not used)� Reliability (eg. MTBF, MTTR)� Performance (ie, efficiency)� Quality of output (eg, scrap)� Total Cost of Ownership (ie, lifecycle cost)

LABOR� Utilization (ie, % productive vs non-value-added

like wait time)� Performance (ie, % of standard/plan)� Effectiveness (eg, % contracted, overtime,

training, innovation, quality)

FINANCIAL/OVERALL� Cost/Unit for inventory, equipment/facility, people� Planned vs Budget vs Actual Costs� Performance to Schedule� Cycle time� “Customer” Satisfaction (eg, response time,

backlog, compliance, satisfaction survey results)� Service Levels� Cash conversion cycle (Inv+AR-AP)

Sample measures are as follows:





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The Purpose of BenchmarkingThe Purpose of Benchmarking

� Benchmarking involves seeking out another organization that does a process better than yours.

� Benchmarks are therefore an outward look to compare your organization with companies which have Best Practices in place.

� This outward look does not have to be a competitor. And it could be an entirely different industry.

Most business processes are common throughout industry – good and bad. Benchmarking within and outside one's industry allows organizations to get the information they need to set goals and find ways to achieve them. Identifying, analyzing, adapting, and sharing best practices allows organizations to do more than simply improve a particular business process. It promotes the emergence and evolution of a "learning culture" throughout the enterprise.





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Measurement:Using the Right KPI’s

To Facilitate Behavioral Change




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The Use of KPIThe Use of KPI ’’ss

� KPI (Key Performance Indicator) is another name for Performance Metric. This form of auditing provides a venue from which to compare activities over time.

� Performance metrics are an inward look to determine where the organization is relative to its goals. The challenge is to habitually seek and adapt ideas . This also means you should revise the metrics each year.

� They are useful in determining where changes are needed to sustain success.





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Key Performance IndicatorsKey Performance Indicators

One of the most successful methods of achieving behavior change is using KPIs. But lasting behavior change is the stuff of planning, sustainable motivation, and careful consideration of the pro or con. Ultimately, create a KPI only when it makes sense and supports the mission of the company.





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Business IMPACT Executive Seminar Series29

The Maturity Path from Innocence to ExcellenceThe Maturity Path from Innocence to Excellence




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Critical Success Factors




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What are the next steps to improvement ?What are the next steps to improvement ?� Get management backing. Find a visionary .

� Setup a Core team – meet on regular basis. Discuss ways to improve maintenance. Organize guest speakers. Share knowledge between EAM power users.

� Learn from others on and off-site. Strive for “best of the best”.

� Develop a Plan of Action.

� Prioritize your list of “things to be done” based on ROI.





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Keys to SuccessKeys to Success� Educated and convinced employees

� NOT just another “program of the month”

� Total management commitment and support

� Allow adequate time for implementation

� Involvement by all concerned employees

� Have one member of staff who can write good report specifications

� Turn information into policy and progress





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Keys to SuccessKeys to Success� Cross-functional, team-oriented, participatory approach involving all key stakeholders

� Adequate budget for successful implementation

� Good communications and change management plan

� Quick Wins process that capitalizes on any ideas that may come out of next steps

� Risk and business impact assessment to anticipate barriers to success and areas of greatest potential for each stakeholder group





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Getting it Right Getting it Right –– NedTrainNedTrain

The Company• Dutch Train Maintenance organization• 6 big Maintenance Locations, 35 Service

Locations

The Challenge• Many different (ERP) systems in separate databases

with limited consistent AM processes across factories• Select a solution with “best practices” built in

The Solution• Maximo Enterprise Suite, CM + SP + TM• Integration to ERP (SAP FiCo and PLM) • IBM providing Implementation Services

The Benefits• Expected savings in Overall Fleet & Contract

management regarding Performance Management, Process alignment, supply chain optimization and information sharing




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Getting it Right Getting it Right –– ProximusProximus

The Company

• Leading mobile phone operator in Belgium• > 4.0 million customers, 50% market share

The Challenge

• High cost of internally developed maintenance solut ions• Inability to manage engineer workforce efficiency• Outage on critical assets (high frequency antennas) leads

to churn

The Solution

• Maximo to provide enterprise asset management soluti on: Equipment management, Workforce planning and scheduling, Work Mgmt, Vendor Mgmt, Site Access Mgm t, KPIs, Mobile access for engineers

The Benefits

• Transparency of installed assets• Single solution for engineering and operation• Process improvements through automated workflow• Manage full Trouble Ticketing process




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Getting it Right Getting it Right –– GilletteGillette

The Company• Gillette• 7 Factories in 6 Countries

The Challenge• Many different systems in separate databases with

limited consistent AM processes across factories• Select a solution with “best practices” built in

The Solution• Maximo Enterprise Suite, Common DB 6 languages• Integration to ERP (SAP)• IBM providing Implementation Services

The Benefits• Expected savings in training, supply chain optimization

and information and process sharing • Project completed




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Getting it Right Getting it Right -- DTE EnergyDTE Energy

• Large, Multi-Business Unit Utility Serving 3.2 M Customers

• Nuclear, 9 Fossil Stations, Gas & Electric Distribution

• Variety of non-regulated businesses including railroad for coal transportation, biomass, merchant generation

The Company

The Challenge

• Consolidate numerous systems into one set of applications for all business units.

• Develop and Implement standard processes for Financial Management, Human Resources, Supply Chain and Work & Asset Management

• Rollout to “virtual company” DTE2

The Solution

• Industry Solutions: IBM Maximo for Utilities and Nuclear Power

• Integrated to SAP Financials and Supply Chain

• MDSI for Mobile and ESRI for GIS

• Hub and Spoke Integration Architecture

The Benefits

• Standardized Processes across the enterprise

• Numerous benefits including; Higher service levels, reduced O&M expense, Increased asset reliability

• $90M annual post implementation benefits

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