Optimizing Your Equipment’s Life Cycle Bo Hagler – Director, R&D, QAD Nancy Majure – Director...

Optimizing Your Equipment’s Life CycleBo Hagler – Director, R&D, QADNancy Majure – Director EAM N.A., QAD

Optimizing Equipment Lifecycle: Enterprise Asset Management

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Safe Harbor Statement


The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD.

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As much as 50% of capital investment in new equipment is made to compensate for the under−performance of existing equipment.• Reputation• Customer satisfaction• Repeat business• Competitive advantage

Why Focus on Asset Reliability


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What is Equipment Life Cycle?


Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset Life-Cycle

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• Cost savings- Reduction in maintenance expense 10% to

30%

• Areas of savings- Increase in production yield

3% to 5%- Reduced maintenance downtime 20%

to 40%- Reduced scrap / rework

5% to 10%- Reduction in annual purchases

5% to 15%- Improved labor utilization

10% to 30%- Increased equipment service life 2

years

Why Optimize Equipment Life Cycle?


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• Project controls• Asset management

- Plant maintenance- MRO / spares inventory - MRO purchasing

How QAD EAM Assists


EAM Project Controls

EAM Asset Management

Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• AP recorded, spreadsheets• Last updated?• Purchase costs only? • Internal labor?• Internal materials?• Subcontractor services?• True acquisition cost?

Project Engineering Challenges


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• Spending control- Electronic workflow approval- Spending alert notification- Provide segregation of duties

• Project work breakdown structure

• Customer projects - Customer reimbursements - Scheduled supplier payments- Margin

EAM Project Controls: Key Capabilities




Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• Manufacturing- Inventory master- Work order costs- BOM

• Service and support management

EAM Project Controls: Roadmap




Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• Overall equipment effectiveness (OEE)- Global average is 55%

• Average unplanned / reactive work is 55%- World class is <10%

• Operating environment- 40% of failures are a result of operator error

• Production losses due to breakdowns- Average range 5% to 10%

• Average overtime is 10% to 20%

Typical Asset Management Challenges


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• Supports preventative maintenance (PM) / PDM

• PM’s triggered based on actual production

• Analyze repair costs for labor, material and contractor expenses

• Measure mean time between failure (MTBF)

• Breakdown alerts via email or page

EAM Plant Maintenance: Key Capabilities




Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• Share scheduling information with production scheduler- MSW/PSW

• Graphical EAM work order scheduling- Visibility into equipment

availability from production

EAM Plant Maintenance: Roadmap


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Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• Annual MRO purchases can equal 1% to 5% of revenue

• In most cases, MRO is expensed at receipt• Unnecessary or incorrect purchases can range

from 10% to 25%• As much as 30% of MRO inventory is obsolete

Typical MRO Environment


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• Manage company catalog for MRO items

• Automatic stock replenish• Supplier price schedules• Consignment inventory• Transfer parts across plants• Request for quote (RFQ)• Requisition approval

workflow

EAM MRO: Key Capabilities




Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• Share RFQ with suppliers via SC Portal

• Contract purchasing

EAM MRO: Roadmap




Commission

Operate

Maintain

Retire / Replace

Design

Construct

Equipment & Asset

Life-Cycle

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• Make better decisions• Support “intentional” decision

making- from preparation- to decision making- to implementation

• Manage by Fact• Improve shareholder value

EAM: Business Intelligence


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• An out-of-the-box, performance management tool that instantly transforms transactional data from EAM into visually-depicted trends.

EAM Roadmap: Business Intelligence


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• Start with a high-level KPI



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• Drill-down to further detail



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• Drill-down to further detail



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• Data can also be analyzed through cubes• September release will include mobile device

access to QAD BI data



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Projects • Cash flow forecast

• Expenditure analysis

• Budget summary

Indirect purchasing• Spending analysis

• Spending by equipment

• Purchases by vendor

• Purchases by commodity

• Rush orders

• Late receipts

MRO inventory• Inventory turns

• Slow moving inventory

• Inventory value trends

• Stock out analysis

Financials• Operational expense cash

flow

• Actual vs. Budget

• Top cost center by % of budget



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Maintenance• Top equipment by cost and

by MTBF

• Top equipment failures

• Top reason by downtime

• Planned vs. Unplanned work orders

• Planned vs. unplanned labor hours

• PM vs. CM work orders

• Work order count by priority

• Equipment availability

Maintenance (by period)• Total maintenance cost• Service request count• Work order backlog

―Count―Labor hours―Average days open

• PM compliance



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• March 2011: general available (GA)• Supported versions

- 2007 SE through 2010 SE- 2007 EE through 2011 EE

QAD EAM Status


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• Project controls- Bring projects in on-time and within budget

- Control excessive spending

• Plant maintenance- Increase equipment efficiency

- Lower cost of repairs

• MRO inventory and purchasing- Right-sizing inventory lowering obsolete items

- Minimize stock-out thereby limited equipment downtime

- Eliminate unnecessary purchases

Review


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Metrics Affected


Process Benefit Value

Manage PM •Production yield •Scrap / rework•Equipment service life

•+10 to 20%•-20 to 50%•+10 to 20%

Manage labor resources •Labor utilization •+10 to 25%

Manage uptime •Maintenance downtime•Production yield

•-20 to 50%•+10 to 20%

Optimize inventory •Inventory value - availability, common across plants•Stock-outs

•-20 to 30%

•-30 to 50%

Manage spend •Annual purchases •-10 to 20%

Officially source items •Approved suppliers, best price

•- 5 to 10%

Control project costs •Manage costs within budget

•Save services

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• Get involved in customer advisory groups• Stop by the EXPO for a demo• Ask your account manager for an EAM

Q−Scan

Next Steps


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• Bo Hagler [email protected]• Nancy Majure [email protected]

Questions & Answers


mailto:[email protected]

mailto:[email protected]

Optimizing Your Equipment’s Life Cycle Bo Hagler – Director, R&D, QAD Nancy Majure – Director...

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