Extend Asset Life and Maximize ROA / ROI. · 2014-08-12 · Extend Asset Life and Maximize ROA /...
Transcript of Extend Asset Life and Maximize ROA / ROI. · 2014-08-12 · Extend Asset Life and Maximize ROA /...
© 2008 IBM Corporation
Extend Asset Life and Maximize ROA / ROI.
ISM WorldTour 2008
IBM Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation2 IBM Maximo Asset Management
Agenda
�Introduction
�Asset Intensive Industry Challenges
�Analyzing Where You Stand
�Patterns and Trends of Asset Managemen
�Where Do You Start?
�Focus on Asset Intensive Industries
© 2006 IBM Corporation
Asset Intensive Industry Challenges
ISM- WorldTour 2008
IBM Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation4 IBM Maximo Asset Management
What are Asset Intensive Industries ?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation5 IBM Maximo Asset Management
How is Asset Management Aligned with the Various How is Asset Management Aligned with the Various Industries?Industries?
For Illustrative PurposesService Intensive Asset Intensive
Maintenance, Repair and Operations (MRO) Spending
MR Spending
O Spending
% o
f Pro
cure
men
t
Banking
Insurance
ProcessManufacturing
DiscreteManufacturing
Transportation
GovernmentEducation Hospitals
Utilities
Retail
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation6 IBM Maximo Asset Management
A History of Asset Management
19801980 19901990 20002000 2010201019701970
•Necessary Evil•Paper Systems•Corrective Maint.•Freq. based PM’s
•New Technologies•PdM•Software Systems•Change PM Freq
•Can Change Bottom Line•Looking at Root Causes•Mature Software Systems•Focus on Components
•Maturing Organizations•Looking at Lifecycles•Upstream Improvements•Wireless Technologies•Software Adjusts to Business
•Self Diagnostics •Communicating Assets•RFID Technology •Wearable Computers •Product Improvements
Past Future
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation7 IBM Maximo Asset Management
Today, Many Enterprises are Challenged with the Same Types of Pressures in Different Ways….
Environmental / green agendaEnvironmental / green agendaEnvironmental / green agenda
Poor reliability and utilisationPoor reliability and utilisationPoor reliability and utilisation
Security, safety pressuresSecurity, safety pressuresSecurity, safety pressures
Competitive environmentCompetitive environmentCompetitive environment
Ageing and under performing assetsAgeing and under performing assetsAgeing and under performing assets
GlobalisationGlobalisationGlobalisationCapital constraintsCapital constraintsCapital constraints
Technology ChangesTechnology ChangesTechnology Changes
Outsourcing / new business modelsOutsourcing / new business modelsOutsourcing / new business models
Overhead costsOverhead costsOverhead costs
Shareholder ExpectationsShareholder ExpectationsShareholder Expectations
Real Estate and Facilities Plant and Production
Mobile Assets
Infrastructure
Information Technology
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation8 IBM Maximo Asset Management
MaintenanceManagement
ProductionManagement
CEO
CFO
CIO
These Same Challenges Are On People and Organizations…They Often Ask “How Can I… …to Improve My ROA / ROI”
…implement best practice organisation and processes across the enterprise? …improve the productivity of our field-force?
…implement best practice organisation and processes across the enterprise? …improve the productivity of our field-force?
….transform our relationship with our suppliers? …
….transform our relationship with our suppliers? …
…reduce total cost of ownership over the asset lifecycle?
…reduce total cost of ownership over the asset lifecycle?
…obtain more intelligence about the condition of our assets? …
…obtain more intelligence about the condition of our assets? …
…become world class with more efficient and cost-effective operations?
…become world class with more efficient and cost-effective operations?
…know if we have the “right” assets and inventory ?
…know if we have the “right” assets and inventory ?
…ensure compliance with regulators? …ensure compliance with regulators?
…make more timely decisions? …make more timely decisions? …improve customer feedback?…improve customer feedback?
…improve reliability and safety performance? …improve reliability and safety performance?
…reduce unplanned outages?…reduce unplanned outages?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation9 IBM Maximo Asset Management
Nearly all organizations say effective service and maintenance practices are very or extremely important to their organizations’ financial success, yet only 7% are completely satisfied with their service and maintenance performance.
What is the Importance of Asset Service and Mainten ance to Enterprises?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation10 IBM Maximo Asset Management
IBM Global CEO Study 2004, multiple answers permittedIBM Global CEO Study 2006, point allocations
Who needs Enterprise Asset Management ?
Products/services/markets
Operations(processes & functions)
Businessmodel
and want to innovate their...
Revenue growth
Cost reduction
Assetutilization
Riskmanagement
they must achieve…...
2004
2006
20% 40% 60% 80% 100%20% 40% 60% 80% 100%
In IBM’s interviews with hundreds of CEOs, they said:
Hint: Effective Asset Management is fundamental to success
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation11 IBM Maximo Asset Management
The “Perfect Storm” is bearing down on asset intensive companies
Globalization
Consolidation
Disparate Legacy IT Systems
vThe Perfect Storm Most Enterprises Face Today…The Perfect Storm Most Enterprises Face Today…
Technology Changes
© 2006 IBM Corporation
Analyzing Where You Stand and Improving It
ISM- WorldTour 2008IBM Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation13 IBM Maximo Asset Management
Best-in-Class Reap Significant Benefits
Best-in-class companies also consistently reported improvements in their top key performance indicators over the past two years.
A much higher percentage of best-in-class organizations have realized advances in these KPIs than have average and laggard organizations
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation14 IBM Maximo Asset Management
What are Some of the ROA / ROI Benefits Realized by Enterprises that address Asset Management?
Quantifiable Benefits Towards Savings / ROI: •Labor Utilization up by 10-20%•Asset utilization up by 3-5%•Increased planned maintenance by 50-80%•New Equipment purchases down by 3-5%•Lost warranty recoveries down by 10-50%•On-hand inventory needs down by 20-30%•Inventory carrying costs down by 5 - 20%•Asset acquisition costs down by 5-10%
Tangible Benefits:•Reduced risk of non-compliance
•Support for Sarbanes-Oxley compliance
•Improved regulatory/safety compliance
•More accurate data for improved decision making
•Improved work planning/coordination
•Improved information on vendor performance and equipment use
•Improved customer satisfaction
ProcessProcessReRe--DesignDesign
ReliabilityReliability
TacticsTactics MeasuresMeasures
DataDataManagementManagement
Planning &Planning &SchedulingScheduling
MaterialsMaterialsManagementManagement
StrategyStrategy ManagementManagement
AutonomousAutonomousMaintenanceMaintenance
Quantum LeapsQuantum Leaps
LeadershipLeadership
ContinuousContinuousImprovementsImprovements
ControlControl
1. Strategy
2. Organization/Management
3. Data Management
4. Maintenance Tactics
5. Materials Management
6. Planning and Scheduling
7. Key Performance Indicators
8. Reliability Center Maintenance
9. Autonomous Maintenance
10. Process Re-design
Manual Operations Automated Operations
Reactive Maintenance Predictive / Preventive
Cost Intensive Cost Controlled
Stand Alone Integrated Solution
Autonomous Sites Corporate Standards
Business As Usual Continuous Improvement
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation15 IBM Maximo Asset Management
Maturity
Value
Evaluating Your Asset Management Maturity Level
IV
Awareness
IV
Awareness
-Work Mgmt-Preventive-Spares parts III
Under-standing
III
Under-standing
-Reliability-Condition-Predictive
VInnocence
VInnocence
-Fire fighting-Run to fail
II
Competence
II
Competence
-All BusinessProcesses-Service LevelAgreements-Service Management
I
Excellence
I
Excellence
-One SystemAll Processes-Asset & ServicesManagement-Enterprise WideBusiness Alignment
amcoeAsset Management Center of Excellence
© 2007 IBM Corporation16 IBM Tivoli - Maximo Asset Management
IBM Asset Management Solutions Helping clients maximize asset effectiveness and ROI
Railways, Electric / Gas Distribution, Highways, Telecom, Water
AssetStrategy
PlanEvaluate and Design
Create / Procure
Operate Maintain Modify Dispose
Asset LifecycleTraditional
Asset Classes
Plant and Production
Real Estate and Facilities
Mobile Assets
Infrastructure
Land, Offices, Warehouses, Retail Space, Schools, Hospitals, Airports
Mining, Textile, Chemical, Petroleum, Electronics, Food, Life Sciences, Power Gen
Military, Airlines, Trucking, Shipping, Railroad, Public Transportation
Information Technologies PCs, Networks, Routers, Applications, Auto Discovery, Service Desk
Broad, best-in-class capabilities for managing all critical assets that drive the business:
� Manage all strategic assets on a single, unified pl atform: common UI, data layer, workflow
� Service Oriented Architecture, J2EE certified
� Industry specific solutions providing deep capabili ties
� Deployed in a Single, Enterprise Wide Instance
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation17 IBM Maximo Asset Management
The Value of Asset Management
LimitedResources
ComplianceFramework
MaximizingReturn on
Assets
Highestreliability
Lowestcost
Reduce labor costs
Improve planning & scheduling
Reduce Inventory
Reduce downtime
Managerisk
Comply withRegulations
Maximize output
Visibility
RetainKnowledge
© 2006 IBM Corporation
Some Patterns and Trends of Asset Management
ISM- WorldTour 2008IBM Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation19 IBM Maximo Asset Management
Basic Asset Class Model
AMcoe Asset Class Model
Real Estate and Facilities Plant and Production Mobile Assets Infrastructure Information Technology
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation20 IBM Maximo Asset Management
Real Estate and Facilities
Land, offices warehouses, retail space, schools, housing, hospitals
• Leases• Tenants• Building services• Construction • Grounds
• Tenant / customer satisfaction
• Building service systems reliability
• Construction project / Asset coordination
• Outsourced maintenance
• Managing “like assets” across properties
Asset Class Uniqueness
Typical ChallengesTypical Challenges
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation21 IBM Maximo Asset Management
Plant and Production
Auto, mining, electronics, textile, chemical, minin g, electronics, food
• Production plants• Production lines• Custom built assets• Line equipment• Utility services
• Workforce management
• Asset reliability
• Maintenance tactics (PM, PdM, RCM)
• Data standards
• Detailed asset configurations
Asset Class Uniqueness
Typical ChallengesTypical Challenges
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation22 IBM Maximo Asset Management
Mobile Assets
Military, airlines, trucking, shipping, railroad, public
• Varying fleet types• Unit uniqueness• Leased assets• Rotating components• Commercial, Government
• Delivering differentiated cost effective services
• Outsourced “heavy” maintenance
• Obtaining data from outsource maintainers
• Government / industry regulations
• Configurations need to account for component positions
Asset Class Uniqueness
Typical ChallengesTypical Challenges
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation23 IBM Maximo Asset Management
Infrastructure
Electric, oil, gas, highways, roads, telecom, water , wastewater
• Linear assets• Outage impacts large groups• Remote locations• Big expensive assets• Commercial - Government regulations
• Locating positions on linear assets
• Assets cover large areas
• Services outages critical and costly
• Outsourced maintenance
• Scheduling maintenance on “off” hours / periods
Asset Class Uniqueness
Typical ChallengesTypical Challenges
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation24 IBM Maximo Asset Management
Information Technology
Asset Class Uniqueness
Computers, routers, networks, software, auto discovery, service desk
• Customer service• Asset configurations• Software version control• Service outage impacts critical • Networks
• Customer “Service Oriented” (Help Desk)
• Assets of varying size, values and mobility
• IT unique needs (Networks, Routers, Servers)
• Electronics (versus mechanical) oriented
• Need to track and update software versions
Typical ChallengesTypical Challenges
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation25 IBM Maximo Asset Management
Asset Convergence
• IT-enabled operating assets
• Networked assets
• Assets with embedded IT
• Blurred service delivery responsibility
Emerging Asset Management Trends: Convergence
OperatingAssets
ITAssets
• Medical systems with on-board computer technology for data collection and system control
Is this an operating asset or an IT asset?
“Smart” home utility meter with embedded software
Is this an operating asset or an IT asset?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation26 IBM Maximo Asset Management
Asset Management Trend: Convergence
OperatingAssets
ITAssets
Benefits:
• Effective use of new technology
• Improved lifetime asset performance
• Lower operational risk
• Medical systems with on-board computer technology for data collection and system control
Is this an operating asset or an IT asset?
“Smart” home utility meter with embedded software
Is this an operating asset or an IT asset?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation27 IBM Maximo Asset Management
Asset and Service Management
IBM Maximo Asset Management is the solution to deliver Asset & Service
Management for all critical assets across the enterprise
Convergence of IT and Operational Assets
1. Provide a single, SOA based platform to manage all critical assets
2. Manage all critical assets throughout their life, extend their life, and maximize lifetime ROI/ROA
3. Prioritize asset management initiatives to align with operating, financial and other objectives
4. Manage risk and comply with accounting, safety and environmental regulations
5. Achieve a more efficient work force and improve management of asset-related parts and inventory
Unique Combination of Asset and Service Management
1. Support operating objectives by defining asset-related service level agreements and by measuring/improving quality of service delivery
2. Achieve proactive performance management by knowing about impending performance degradation and by correcting through automation or with alerts for manual intervention
3. Establish and execute asset and service management best practices according to distinct priorities, ensuring optimal service for the customer and the business
Transparent Compliance with Regulatory and Risk
Management Requirements
1. Always know the current state, and past performance, of your assets
2. Establish standard asset management practices and know when and how they were performed, and by whom
3. Ensure that the processes for securing your assets and the information about them are in compliance with regulatory requirements
4. Gain the flexibility to continuously adapt your business processes and meet constantly changing business and regulatory requirements.
Value Proposition: Enables organisations to manage the end-to-end services and businessprocesses that keep the entire asset infrastructure efficient and aligned with the goals of the business, while maintainingregulatory compliance
© 2006 IBM Corporation
Where Do You Start ?
ISM- WorldTour 2008
Tivoli – Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation29 IBM Maximo Asset Management
You Can Start by Analyzing Some of Your “Pain Points
� A Simplified Method…
– List Your Top Five to Ten “Pain Points”
– Develop a “Savings Scenario” for Each “Pain Point”
– Gather Data Related to Each “Savings Scenario”
– Develop “Cost Per Year” Savings Calculation
– Estimate Savings % based on Known Facts and Assumptions
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation30 IBM Maximo Asset Management
Business Case ElementBusiness Case Element
ROA / ROI CalculationsROA / ROI Calculations
Benefits Realization Framework Benefits Realization Framework
Each Savings Scenario Equates to:
SavingsScenario
SavingsScenario
Cost Per Year
Justification and Documentation for Improvement Eff orts
You Can Start by Analyzing Some of Your “Pain Points
© 2006 IBM Corporation
Industry Focused Solutions to Help
ISM- WorldTour 2008
Tivoli – Maximo Asset Management
© 2008 IBM Corporation32 IBM Tivoli - Maximo Asset Management
Maximo Industry Solutions
� Transportation / Fleet
� Utilities (Transmission & Distribution)
� Spatial Asset Management
� Nuclear Power Generation
� Oil & Gas
� Life Sciences Pharmaceuticals
� Government
� Maximo meets the need of many industries out-of the box
� For some industries Maximo offers unique industry functionality
– Delivers more complete solutions and more rapid, lower cost implementations
– Delivered with out of the box Industry specific content, business processes
– Supports Industry specific regulatory compliance: FDA, NRC, DOT
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation33 IBM Maximo Asset Management
Shorter lead times require reliable assets
Maximo’s track recordIn process industry
”extended enterprise” needs enabling systems
Maximo supports fullAsset Life Cycle
Maxmio improves cost visibility/allocation, and analysis for cost reduction
Maximo improves equipmentperformance and manages
stock to reduce cost
Maximo manages all required data to meet regulatory compliance
Maximo unlocks Assetconstraints to achieve
maximum Lean benefits
Maximo provides data to manage Quality and supports OEE
Manufacturing Industry
ASSET MANAGEMENTbecomes a criticalbusiness activity
Quality
Lean/Six Sigma/TPM require reliable assets
Managing Risk & Compliance
- Sarbanes Oxley, ISO, FDA, SHE
Inventory: Pressure for stock reduction.
Cost Control
Product LifecyleManagement
Service Management/OutsourcingTrend towards core business.
Automation
Demand driven,Mass-customization
© 2008 IBM Corporation34 IBM Tivoli - Maximo Asset Management
Maximo for Utilities
KEY Features
Compatible Unit Estimating
Compatible Unit Library
Compatible Unit Administration
Crew Management
Assignment Manager for Crews
Maximo Project Manager for Crews
T&D Adaptor - MEA: Graphical Design, MWFM, CPR (Fixed Asset)
Transmission & Distribution
• Leadership quadrant in Gartner’s Work & Asset Management MQ• Active user group: Maximo Utility Working Group• Power Generation requirements meet with base Maximo
IBM Maximo Spatial Asset Management
© 2008 IBM Corporation35 IBM Tivoli - Maximo Asset Management
Nuclear Power Poised for the Nuclear Renaissance
Equipment ReliabilitySurveillance testingPM SequencingVendor QualificationsQuality and Technical TermsCommitment TrackingClearancesImpact PlansSNPM Workflow / Nuclear Content
The Standard Nuclear Performance Model (SNPM) is a set of processes based on the results of benchmarking by Institute of Nuclear Power Operators, Nuclear Energy Institute, and Electric Utility Cost Group. Maximo has many of the these processes embedded.
Key Features
•Increasing marketshare in North America and Worldwide
•IBM has established Center of Excellence for Nuclear Power in La Gaude, France
•Nuclear is becoming an “environmentally friendly” option
SNPM
© 2008 IBM Corporation36 IBM Tivoli - Maximo Asset Management
Oil & Gas Key Features
Asset Specifications
Failure Codes
Location Details
Condition for Work
Prioritization Matrix
Regulatory Compliance
Incidents / Problems / Defects
After Action Review
Root Cause Failure Analysis
Solutions / Improvements
Benefits / Losses
Drilling Deep for More Production
Multiple Segments of the Energy Value Network –(upstream, mid-stream and downstream
Super Majors• Exploration & Production• LNG
Global & Regional Refiners• North America• Africa• Vietnam
National Oil Companies• Upstream & Downstream
Knowledge Management
Explicit knowledge•Codified and transmittable in formal languageTacit knowledge•Know how e.g. skills of a craftsman•Cognitive dimension – mental models, beliefs
© 2008 IBM Corporation37 IBM Tivoli - Maximo Asset Management
Transportation
Linear Asset Management
• Management attributes of linear assets• Rail, highway, pipeline, powerlines
• Aviation• Education• Fleet & Logistics• Government• Rail • Utilities
Key Sectors Key features
• Asset History �Asset Alias• Fuel Import �Primary Meter• PM Enhancements �Repeat Repairs
Configuration Manager• Focused on airline engine manufacturing,
airlines, and rail
© 2008 IBM Corporation38 IBM Tivoli - Maximo Asset Management
Government
Maximo for Government New: Dec 14, 2007
Assets for the people, by the people.
• Government has poor visibility and no control of assets. • Government also has increased accountability for personal property and increased focus on asset performance and mission readiness. • US Contractors must meet new property management regs(FAR part 45 rewrite)• US Government (DoD & Civilian) must meet requirements for real and personal property management (EO 13327) • Governments must comply other regulations that rely on sound property practices (US- FISMA)•State & Local Governments need support for compliance with
regs such as GASB 34 and 42.
Key Features
Government Contracts
• Personal Property
• Unique Identification (UID)
Compliance
Two new applications
• Government Contracts
• Personal Property
President’s Management AgendaGAO•CFO ActFAR/DFARDoDMemo dated 12 May 2005
“Improve accountability, accuracy, and reliability”
Regulatory Requirements
© 2008 IBM Corporation39 IBM Tivoli - Maximo Asset Management
Only vendor that can manage all asset classes on a single, unified architecture, combined with service desk, change and configuration management.
Deep industry knowledge across a broad spectrum of asset intensive businesses -Oil & Gas, Utilities, Transportation, Life Sciences, Nuclear Power, Government, etc.
Built-in configuration tools allow for easy, on the fly changes to UI, workflows, processes, reports. Configurations readily upgrade from one version to the next.
Only vendor to provide Software Asset Management for both distributed and mainframe environments and help manage complex license entitlements.
Web-architected platform built on J2EE with advanced business process management; based on SOA, web services and XML.
Supports 7 ITIL processes out of the box: Incident, Problem, Change, Release, SLA, Configuration, Availability.
IBM offers full breadth of end-to-end asset and service management solutions that operate on a common web services infrastructure.
Unified Solution
Industry Expertise
Ease of Configuration and Upgradeability
Software Asset Management
Leading, standards-based technology
Built ground up on the ITIL framework
Breadth of Service Management offering
Why IBM?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation40 IBM Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation41 IBM Maximo Asset Management
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation42 IBM Maximo Asset Management
Key Challenges for the Energy & Utility IndustryRegulatory Compliance
Energy Policy Act of
2005
CLIMATE & ENERGY
Aging InfrastructureAverage Plant 33.7 years old
Aging Workforce
Mandated reliability standards with severe fines for non-compliance
•Climate is driving Carbon cap and trade programs
•States are mandating renewable portfolio standards
•Smart meters and intelligent grid projects or pilots are in progress
“Climate change issues will drive increased investment in energy and information technologies” IDC Energy Insights January 2008
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation43 IBM Maximo Asset Management
Key Challenges for the Chemical & Petroleum Industry
Energy Prices Impact CostEnergy Prices Impact Cost
Competing for less reservesCompeting for less reserves
2008 Security Conference Monday, March 3 - Wednesday, March 5, 2008
2008 National Safety Conference Wednesday, May 7 - Thursday, May 8, 2008
2008 Reliability & Maintenance Conference Tuesday, May 20 - Friday, May 23, 2008
Reliability, Safety and SecurityReliability, Safety and Security
Aging Assets/Aging WorkforceAging Assets/Aging Workforce
Operational Efficiency
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation44 IBM Maximo Asset Management
Key Challenges for Healthcare & Life Sciences
Increasing Economic Pressure on Healthcare
Adoption of New Business and IT Models
Market Drivers / Change Agents
Emergence of New Technologies
Globalization
Consumerism
Aging / Chronic Illness
Expensive New Treatments
• Standards Adoption
• Changing Business Models
• Value of IT
Business & IT
Innovation
Price Inflation
Health Premium Increase
Rising National Health Expenditure
Growing New Drug R&D Cost
Stagnating GDP Growth
IBM Business Value Series www-ibm.com
Healthcare 2015 Pharma 2010
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation45 IBM Maximo Asset Management
Key Challenges for Automotive Manufacturing
� Responding to market demands in a timely manner.� Increasing complexity in product development due to
proliferation of new models and of increasing software and electronics content in the vehicle.
� Management of global supply chains and global product networks
� Warranty costs driven by electronics and software issues� Flexibility of existing production facilities� Location of production capacity (primarily in mature markets)
not aligned with global demand (new markets) � Aging workforce and skilled labor� Regulatory and industry compliance� Supply Chain challenges� Price & Cost pressures� Product Quality and Manufacturing efficiency
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation46 IBM Maximo Asset Management
Key Challenges in the Industrial Sector
Macro-economic Changes� Globalization
Competitive Pressures� Challenge to respond to market demands in a timely manner
� Brand Erosion
�Commodification, Price & Cost pressures
Changing Customer Requirements
�Aging workforce and skilled labor� Warranty costs driven by electronics and software issues� Flexibility of existing production facilities
�Product Quality and Manufacturing efficiency� Location of production capacity (primarily in mature markets) not
aligned with global demand (new markets)
New Business Model Pressures� Regulatory and industry compliance� Supply Chain challenges� Workforce effectiveness and collaboration
�Management of global supply chains and global product networks
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation47 IBM Maximo Asset Management
Key Challenges for the Transportation Industry
� Increasing asset reliability and availability, as these affect the “customer experience”
� Improving asset performance to reduced the impact of rising fuel costs & reduced funds
� Capturing actual asset costs for labor, materials, tools & services
� Optimizing inventory levels & reducing costs
� Recovering warranties
� Managing with an aging workforce
� Capturing accurate data to drive condition based PM programs
� Addressing the needs of a large variety of moving assets while consolidating solutions
� Minimizing risk with new systems
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation48 IBM Maximo Asset Management
What are enterprise assets?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation49 IBM Maximo Asset Management
Asset Management - Business Oriented
Improved return on assets can be generated by:
�delivering optimum economic production,�controlling costs, and/or�making the best use of the organisation's capital b ase.
Asset management focuses on where the greatest leverage is for the particular organization
Return on Funds
Profit generated
Capital employed
Revenue
Costs
Fixed
Working
Price
Quantity
Product quality and reliability
Process and equipment availability and productivity
Cost control/reduction
Equipment/fleet size
Spares/Stockpiles
Drivers:
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation50 IBM Maximo Asset Management
Any firm with a Fixed Asset to Revenue (FA/R) ratio of 0.5 can benefit from EAM. The higher the ratio, the more EAM is the key solution
Example: Oil & Gas or Electric Power GenerationBalance Sheet: Property, Plant & Equip. = $750,000,0 00Income Statement: Revenue = $500,000,000Therefore Fixed Asset to Revenue ratio is = 1.50
Industry Fixed Asset / Revenue Ratios
EAM Value Add & Solution Priority & User Count
Zero Some HUGE!Large
0.00.0 0.50.5 2.02.01.01.0 1.51.5FA / R: 2.52.5 3.03.0
Chemicals
Oil & Gas
Pulp & Paper
CommunicationsHeavy Metals IFA Utilities
Aggregates
Heavy Construction
MiningConsulting Defense
TransportationFoodConcrete – asphalt - stone
Focus on Purchased Materials
Focus on Equipment Availability & Utilization
High Low
HighLow
Who Needs Enterprise Asset Management ?
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation51 IBM Maximo Asset Management
Aging WorkforceBusiness Drivers: Maximize Workforce ProductivityAging WorkforceBusiness Drivers: Maximize Workforce Productivity
� Maturing baby boomers are followed by a much smaller group of generation Xers, making potential replacements increasingly difficult to find and hire
� Energy and Manufacturing median age higher than average
� Spike in percent of employees 45-54
� Labor replacement and knowledge retention issues
� Leading companies improving and standardizing business processes and deploying IT to reduce the need for additional labor
US Employee Age Distribution
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
16-19 20-24 25-34 35-44 45-54 55-64 65+
Oil & GasUtilitiesManufacturingAirlinesTelecomAll Industries
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation52 IBM Maximo Asset Management
Survey on Changing Workforce Demographics
Source: ASTD/IBM Learning and Changing Workforce Demographics Study.
What approaches are being used in your organization to transfer the knowledge of maturing workers? (Select all that app ly.)
n=237
60%
46%
30%
29%
29%
3%
2%
2%
22%
0% 10% 20% 30% 40% 50% 60% 70%
Mentoring
Document/knowledge repositories
Mature workers used to deliver classroom content
Fostering the development of communities of practice
Lessons from mature workers captured and embedded in existinglearning programs
Expert systems/artificial intelligence
Capturing of audio/video interviews of retiring employees
Other
We are not using any approaches
Extend Asset Life and Maximize ROA / ROI
© 2008 IBM Corporation53 IBM Maximo Asset Management
Application Consolidation• Consolidate applications and vendors
for superior asset management• Leverage one solution across the enterprise
Benefits :• Lower software and implementation costs• Lower infrastructure complexity• Lower operational risk
ProductionEquipment
TransportationAssets
Facilities IT Hardwareand Software
Other Emerging Trends: Consolidation