Enterprise Asset Management

Mark Gibbison SAP UK Industry Principal Local Government, Health and Higher Education

Workshop Outline
What are you dealing with Effective Asset Management Potential for Cost Savings Typical Pain Points Enterprise Asset Management Drivers and Benefits

What are you dealing with

Local authorities in Scotland control land, property, plant and equipment worth an estimated 18 billion Constitutes the second highest cost on revenue budgets after employee expenses Improvement in the strategic and operational management of capital assets could have a real impact on financial resources Efficiencies and options for reinvestment

Enterprise Asset Management Pain Points

Typical Pain Points Points
Capital Expenditure Expenditure Key Observations

Disconnected systems not linking critical data between design and purchasing costs between design and purchasing costs

Lack of software tools that would reduce design time and validate proper equipment time and validate proper equipment selection
Lack of data. Not knowing what the life of equipment is and therefore full project equipment is and therefore full project life cycle costs costs Incomplete Asset Registers Unknown Value of Assets Unknown condition of assets Limited visibility of depreciation Lack of visibility of operation data including maintenance costs maintenance costs Not able to accurately determining whether to repair, refurbish or replace equipment repair, refurbish or replace equipment

Asset Value/Condition Value/Condition

Operating Expenditure Expenditure

Enterprise Asset Management Pain Points (Continued)

Typical Pain Points Asset Utilisation

Key Observations

Lack of timely and accurate preventative maintenance data Poor, inadequate planning and scheduling data of personnel and maintenance activities Lack of consistency and data transparency across the company Lack of data auditability Lack of central data source for health and safety Lack of integration with employee, HR, data

Health, Safety and Environmental (HS&E) Performance

Enterprise Asset Management . . . An Evolution

Computerized Maintenance Management Systems

Asset Registers Asset Valuations Asset Maintenance Schedules Procurement and Inventory

Full Enterprise Asset Management

Human Resources Time and Payroll Skills Management Inspection and Calibration Asset Condition Monitoring Mobile Inspection Project Management Core Financials Financial Optimisation Capital Investment

Planning

Redeployment/Disposal
Alignment with Business

Strategy

Enterprise Asset Management

Enterprise

Looks at more than one plant, but is flexible enough to accommodate

local variations Uses standard business practices and KPI's

Focuses on assets and optimization, not just on maintenance Optimizes equipment lifecycle decisions

Asset

Management

Balances performance, risk, and cost to achieve maintenance excellence Looks at maintenance in a business context to drive company profits

EAM Potential for Cost Savings

Maintenance Cost Escalation in the US
2000

Key Observations

1800
1600 1400 1200 1000 800 600 400 200 0 1979 1990 2000

Maintenance costs have risen 10-15% per year for the past 25 years

Total maintenance spend is over $2 trillion

Approximately one third of the total maintenance spend is unnecessary

Maintenance workers spend fewer than 4 hours per day performing hands-on work

USD in Billions

Necessary Wasted

Downtime costs from lost production outweigh direct maintenance costs by a ratio of 4:1
Source: Benchmarking Best Practices in Maintenance Management, Terry Wireman, 2004

EAM Potential for Cost Savings

Asset Management Activity Tracking

70

.organisations are not thoroughly tracking some of their most important maintenance activities, leaving significant untapped opportunity to save operating costs.

60

50

% of respondents

40 30 20 10 0
65.5% 53.6% 49.6% 45.2% 35.3% 26.6% 26.2%

Source: Aberdeen Research, Enterprise Asset Management Benchmarking Report, 2003

Enterprise Asset Management Business Drivers

Improve visibility and control over expenditures

Increase asset productivity and speed up repair cycles Drive continuous improvement through Analytics

Enterprise Asset Management . .

Asset Maintenance

MRO Procurement & Inventory

Human Resources

Inspection & Calibration

Asset Health Monitoring

RFID and Mobile Devices

A complex business process

Project Management

Materials Requirements Planning

Core Financials

Financial Optimization & Reliability Reporting

EAM A Complex Business Process

Asset Maintenance

MRO Procurement & Inventory

Human Resources

Inspection & Calibration

Enterprise Asset Management is a complex operation involving multiple processes, departments, and business partners

Asset Health Monitoring

RFID and Mobile Devices

Project Management

Materials Requirements Planning

Core Financials

Financial Optimization & Reliability Reporting

EAM A Complex Business Process

requires a complete business solution for all the important facets of your Enterprise Asset Management operations...

EAM A Complex Business Process

Middleware

Middleware

middleware technology and Enterprise Services Architecture provide an open integration, application, and composition platform . . .

EAM A Complex Business Process

Enterprise Systems

Enterprise Systems
Middleware 3rd Party Systems

Legacy Systems

3rd Party Systems

. . . enabling the only completely integrated, endto-end Enterprise Asset Management solution.
Legacy Systems

An EAM should Support . . .

Design & Specify

Business planning
Investment management Collaborative specification

and design Maintenance engineering

Interfacing CAD systems Project management Maintenance cost planning

An EAM should Support . . .

Procure & Build

Supplier qualification and

candidate selection Bidding and contract management Procurement process Document management Project management Collaborative construction Project and investment controlling

An EAM should Support . . .

Operate & Maintain
Asset Register Financial Integration Preventive and predictive

maintenance
Maintenance planning and

scheduling Work order management

Mobile asset management

and RFID Contractor management MRO and services procurement Work clearance management Shutdown planning Interfacing GIS and SCADA

An EAM should Support . . .

Decommission & Dispose

Asset transfer and disposal Collaborative disposal

management Document management

Project management
Waste management Asset compliance Asset re-marketing

..and Give You the Ability to . . .

Collaborate
Design collaboration Collaborative project management Business partner web portals

Analyze
Integrated asset accounting Asset and maintenance reporting Damage analysis Spend and supplier performance

analytics Budget tracking

Optimize
Asset performance management Maintenance cost planning Reliability-centered maintenance Predictive condition monitoring Operator dashboards Underpin Corporate Business

Strategy

A Complete Enterprise Asset Management Solution

Asset Maintenance

MRO Procurement & Inventory

Enterprise Systems

Human Resources

Inspection & Calibration

Middleware Open Integration, Application,

and

Asset Health Monitoring

RFID and Mobile Devices

3rd Party Systems

Composition Platform
Materials Project Requirements Management Planning

Core Financials

Financial Optimization & Reliability Reporting

Legacy Systems

Enterprise Asset Management Differentiators

Covers all aspects of an assets complete lifecycle, including the

Complete Solution

needs of the maintenance organizationand much more

Scalable Solution

Supports local plant views while covering the enterprises entire

asset portfolio

Corporate Solution

Enables common business practices across the enterprise,

with the ability to perform global inventory checks

Adaptive Solution

Adapts with your business, fueling growth and empowering

improved maintenance and reliability

An Adaptive Business Network

enables planning and execution of an optimal enterprise asset management strategy . . .

An Adaptive Business Network

. . . at the same time empowering you to sense and respond to changes in your business strategy, creating an adaptive and responsive business network.

Integrated Enterprise Asset Management Paybacks

Tangible Benefits Increased planned maintenance Reduced emergency work Reduction on excess inventory Improved asset availability Increased maintenance productivity

Average improvement 78% 31% 29% 17% 29%

Source: Benchmarking Best Practices in Maintenance Management, Terry Wireman, 2004

Summary
Asset Management is a Corporate issue Best addressed by an Enterprise Solution Asset Management Strategy underpins Business and Financial Strategies 0.1% Saving on 18billion bottom line .?

Enterprise Asset Management

Mark Gibbison SAP UK Industry Principal Local Government, Health and Higher Education