Say goodbye to the days of break-fix. Keeping plant-floor equipment up and running is now so important that maintenance cannot be left to fate anymore.
Manufacturers that have long been content to maintain their equipment in reactive mode are now demanding that their plant operations work hand-in-hand with line-of-business and top company managers when it comes to making critical maintenance decisions such as the timing of scheduled maintenance and how much uptime the business would agree to pay for. No longer a humdrum cost center, maintenance and asset management are now being viewed as key business services and sources of competitive
"Internal maintenance groups are now applying a service philosophy to the way they deliver asset management," says Rich Caplow, director of product marketing for MRO Software (Bedford, MA). There is no longer an informal understanding of how asset management tasks get done within an organization. "This is now a negotiation, complete with service level agreements," adds Caplow. "Management wants to see a better return on investment for the lifetime of the assets."
This development is a natural result of the growth in lean manufacturing. Not so long ago, manufacturers would often have several machines that performed the same task. If one broke down, it was not a huge deal to swap it out for an identical model. With so much excess capacity, maintenance tasks -- including sourcing of spare parts, taking machines offline for regular service and dispatching repair people -- were hardly mission-critical. This all changed as companies discovered they could do without the duplication.
"If we don't have extra machinery and ca pacity, we have to make sure the time and money spent on maintenance is very carefully targeted," says Quentin Brearly, director of product management for Glovia International (El Seguendo, CA, a Fujitsu Co.). "Plant maintenance is becoming more critical to everyday operations. The plants have become leaner and leaner, and there is more and more reliance on critical machines." Glovia added an integrated asset management module to its ERP suite in March.
One manufacturer that is making a major push toward more efficient use of shop floor machines is Portola Packaging Inc. (San Jose, CA), a mid-size maker of containers for the food and beverage industry. "Improving asset maintenance and management is just critical today. We want to run everything at 90-plus percent efficiency," says Ara Chakrabarti, the company's CIO. For Chakrabarti, having an EAM tool that is integrated with the ERP system is paramount.
"We need to compare resources in one plant to resources in another plant -- maintaining them, tracking them, checking inventory. That has been a very difficult proposition without getting into a big integration project," he says. Chakrabarti long lobbied Glovia, his ERP vendor, to add an integrated EAM module to the suite. He expects to implement the new Glovia tool this fall.
Although there is not currently a service level agreement between his business and the maintenance organization, Chakrabarti does not rule out that possibility for the future. In the meantime, maintenance has raised its profile within the enterprise.
After all, maintenance of tools, presses and moulds is a substantial line item in Portola's budget. "This is very critical to our business. The vice president of operations, the plant general managers, the CFO -- we all keep an eye on this. Preventive maintenance and asset management has become so much more important to us," he says.
SERVICING THE SERVICE PROVIDERS
Software vendors are getting into the game by selling their systems to providers of enterprise asset management (EAM) services. "They figure they have software that supports maintenance of equipment -- why can't a service provider use it?" says Sid Snitkin, vice president of service and asset management, ARC Advisory Group.
Indus International Inc. (Atlanta) calls this service delivery management. "Organizations are much more reliant on outside providers for maintenance. The outsourcers that are taking on those obligations need to be able to manage the delivery of maintenance services to those customers," says Connor Gray, vice president of product strategy for Indus.
The objective for maintenance service providers and in-house maintenance departments alike is to become process-centric, rather than asset-centric or even customer-centric, says Gray. For example, a customer calls its service outsourcer to report an equipment breakdown. The provider's course of action depends on the customer's service level agreement, which repair people with what special skills are out in the field and when the machine was last serviced. "The asset management solution will determine spare parts availability and schedule and deploy the work order to the field technician," says Gray. The key is to calibrate the scheduling of work against the commitments that have been made.
GE Fanuc Automation Americas Inc. (Foxboro, MA, a unit of GE) sells an asset management solution called GE Predictor to its own divisions and other service providers. GE Predictor allows plant operations personnel armed with handheld computers to scan bar codes on plant floor machinery. After going through a maintenance checklist, the inspector syncs up the handheld with the host system, which then generates any necessary work orders automatically.
Having an asset database filled with past performance data gives the provider the ability to spot failure trends in advance, as well as identify cost-savings opportunities. "You can generate a whole history of one machine. You can download that to a PDA or look up warranty and repair information online," says Lance Miller, EAM marketing manager for GE Fanuc. This chips away at the reams of paper that can still be found in most plant maintenance organizations. Increasing efficiency in this way can help the maintenance organization improve the service it provides to its internal customers, decreasing the likelihood that an outside provider will swoop in and steal away the business.
SERVICE MANAGEMENT IN ACTION
In July, MRO announced it would begin building service management capabilities into its Maximo Enterprise EAM suite, which targets maintenance service providers. The extension will essentially allow Maximo to coordinate maintenance and repair services provided to specific manufacturing equipment based on pre-determined service level agreements. (For more on how the process will work, see sidebar on this page.)
"We are working on the escalation path that kicks in once an incident is reported," says Caplow. He expects the solution to ship early next year.
In order to make the combination of EAM and service management pay off, maintenance organizations will need to change the way they think and work. Whether you're an internal or external provider of asset management services, what's important is to engage your customers in a discussion about priorities.
"You arrive at an agreement about what's important, and you put it down on paper -- the constraints, the variables, the conditions that will be met" as well as how much they are willing to pay for it, says Caplow. "The maintenance department could commit to 98% availability, but that might require a bigger parts inventory that will cost $250,000 more per year. Is it worth it? The heart of this is a much more sophisticated conversation about tradeoffs."