Asset Management Best Practices
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1 Asset Management Best Practices Summary of a Five-Part Series on Maintenance Best Practices A series of white papers dedicated to Asset Management Best Practices. Maximize Asset Performance. Improve Operating Efficiency. Increase Production Uptime
2 Asset Management Best Practices: Summary Have you implemented an Enterprise Asset Management (EAM) or Computerized Maintenance Management Software (CMMS) solution? Has your maintenance, storeroom, and purchasing functions implemented clear and defined Best Practices to go along with your CMMS/EAM Solution? Did you develop a "Return on Investment" justification for the project, promising substantial improvements in asset performance, reduced equipment downtime, lowered MRO inventory levels and decreased purchasing costs? A typical software company focuses on selling software only, while promising savings without a clear and proven approach. Did you know industry research shows up to 80% of all CMMS/EAM implementations fall short of achieving ROI goals? For you to be successful, a technical software implementation alone is not sufficient to achieve and sustain success. The software must be combined with Maintenance Best Practices to fully realize and achieve ROI. One common challenge seems to be at the heart of every asset management operation. And that problem is information and lack of quality data. Struggling organizations are unable to generate the asset management information they need, in order to make informed and educated business decisions about their operation. The data flowing into their Computerized Maintenance Management System (CMMS) / Enterprise Asset Management (EAM) solution suffers, and so does their ability to make the best business decisions. So, what do organizations need in order to generate accurate and meaningful EAM information? The most common include: Data - Coding structures, world-class naming conventions, nomenclature standards to drive ease-of-use and optimized reporting 770 Pelham Road Greenville, SC phone fax
3 Business Processes - Structured, role-based, industry proven business processes to create efficiencies and improve the quality of data Roles & Responsibilities KPIs - Standard role-based dashboards to monitor and measure success to monitor and evaluate performance Reporting Data EAM static data is the most overlooked and under-appreciated element of the EAM system. Many failure codes, etc. and as a result reporting suffers. It can also be difficult on the users. Having to surf your way through incomplete and inaccurate EAM data frustrates users and discourages system use. If the data foundation is not properly laid then the EAM system will struggle to create value.
4 Equipment Hierarchy The Equipment Table contains information on the organization s assets (i.e., buildings and equipment), such as descriptions, classifications, criticalities and locations. The Equipment Table should also define the equipment s hierarchical (or linear) asset structure within each organization. A well-defined equipment hierarchy identifies asset relationships and levels, such as parent and child assets. These relationships facilitate analysis both on "roll up" or aggregate levels (such as by plant, by time period) and also on detailed levels (such as by department or per asset). Coding Structures Coding structures are used to help sort, group and organize information. EAM codes such as equipment criticalities, work order types, priorities, statuses, reasons for outage, inventory classes, purchase order types, vendor service codes are all examples of EAM data coding structures that support asset management Best Practices. EAM codes are also critical to system reporting and analysis capabilities as they are at the root of many key performance indicators (KPIs). For example, a KPI to measure the percentage of reactive maintenance requires that work order coding segregates reactive maintenance work from other types of maintenance work. Work Type CAL CORR DEMO FAB IMP CAP PDM PM RBLD RP ST Field Description Calibration Corrective Work Demolition / Decommission Replacement Part Fabrication Improvement / Modification Maintenance Improvement / Modification Capital PDM Maintenance Tasks PM Maintenance Tasks Rebuild or Refurbish Equipment Repairable Spare Standing WO Business Processes Best-in-Class maintenance organizations have Asset Management processes in place for Work Management, Spare Parts Inventory, and Procurement. Processes must be efficient and, most importantly, effective in order to generate good Transactional Data. An inaccurate or inconsistent process will yield sub-standard data. Business rules must be put in place that provide structure and establish guidelines for the process. This includes defining what role or function in the organization is responsible for a particular process (i.e. Maintenance Planner clearly understands his/her role and what process to follow).
5 Creating complete and accurate EAM Transactional Data drives reporting, analysis and key performance indicators. Processes must be monitored, measured and audited on a regular basis. Processes must be part of an overall Performance Management Program to ensure continuous improvement and compliance with Best Practices. The values of enacting defined processes include: Improved efficiency occurs as workers follow the same process for each asset and every work order. Instead of reinventing the wheel each time, maintenance follows documented work flow, reducing unnecessary guesswork. Good transactional data, which is created as an output of a process. Asset Management Transactional Data is the heart and soul of the CMMS/EAM solution because it drives reporting and analysis outputs and helps to monitor and measure performance. Transactional Data is only as good as the process that is employed to collect it. Measureable results can be achieved and monitored through easy reporting and KPI tools in your CMMS/EAM. Measureable results that can easily be accessed and quantified occur when an efficient, disciplined process is followed that captures good transactional data. Roles & Responsibilities People execute processes that in turn create data. Therefore, people have a significant impact on data quality, so they must be committed and in the best position organizationally to help generate complete and accurate information.
6 Proper definition of Roles & Responsibilities and implementation of specific roles or functions is critical to achieving a best in class maintenance organization. A roles matrix, for example, is a valuable way to clearly understand the role each employee plays for all maintenance, inventory, and purchasing processes. In Table 1 below, you see an abbreviated RACI Chart which describes each activity and establishes which roles are involved in completing that task. The name RACI derives from the level of involvement assigned to each role for an activity: R Responsible for activity A Accountable for activity C Consulting during activity I Informed of activity With the proper details outlined for the various roles within your maintenance organization, you will provide structure and definition for your workforce that will directly impact team morale and provide the company with clear requirements for hiring or promoting employees from within. Each role will understand their responsibilities to help the company be successful and evolve the maintenance organization to best in class. Most importantly, each role is clearly aligned with specific business processes, and each business process ensures quality data is captured. KPI s & Reporting Key Performance Indicators (KPI s) and Reporting are arguably the most important piece of the Best Practices program. To be successful and make continuous improvements to your organization, you must begin with the end in mind. Having metrics and reports that provide reliable information is critical to making business improvements and the key to a successful best practices program.
7 Key Performance Indicators (KPI s) measure how well a facility, department, business function, role or asset is performing. KPI s help your organization monitor a specific business process, and manage the compliance of that process. The success of the best practices program, as we have been describing in the previous white papers, is dependent on adherence to a disciplined process, quality data input, and well defined roles and responsibilities. KPI s are critical to understanding how well you are performing and where you need to make improvements in order to evolve to best in class. With proper built-in tools, all data stored your CMMS/EAM should be accessible for use in the creation and distribution of userconfigurable customer specific dashboards, KPIs and metrics that meet your specific Asset Management business objectives. An easy-to-use and robust analytics platform will enable visualizations to provide the ability to manage KPIs, trends, multi- dimensional and what-if analysis and can be merged with relevant enterprise data from other departments or even external vendors. You should have real-time anywhere access to more relevant and comprehensive data. The software must be combined with Maintenance Best Practices to fully realize and achieve the quickest ROI. A truly integrated CMMS/EAM solution should deliver all the elements out of the box necessary to realize cost savings and the path to maintenance excellence. This will create and transform CMMS/EAM data into actionable and intelligent business information that creates value across the organization, improves profitability, and drives continuous improvement. Best Practices integrated with a CMMS/EAM solution will provide the ultimate path to Best-in-Class maintenance. Best Practices are the foundation that will ensure your organization quickly achieves the full ROI on your Asset Management solution and provide the strategic roadmap to achieve operational and maintenance excellence. For more information about how we can help you with asset management Best Practices, contact us at: or hope.brooks@assetpoint.com
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