Next-gen asset management systems

Automating and optimizing plant maintenance

by Eric Luyer, manager industry marketing, manufacturing industries, MRO Software Inc.

In his book Lean Six Sigma, consultant Michael George said that as much as 50 percent of capital investment in new equipment is made to compensate for the under-performance of existing equipment due to low Overall Equipment Effectiveness (OEE). It’s no wonder. For too long, too many manufacturers took a fail-and-fix approach to the maintenance of their plant assets.

More recently, manufacturers are embracing predictive maintenance philosophies to boost OEE, a method for measuring how assets contribute to a production rate, yield, and utilization. With plant maintenance consuming up to 10 percent of all operational expenditures, according to Gartner Inc., manufacturers need to squeeze more value and longevity from plant assets. They also need to find ways to improve plant maintenance to meet new regulatory and competitive pressures, such as Sarbanes-Oxley or FDA. 

To this end, a new generation of Web-based technology is letting them do so by automating and optimizing asset management plant wide. Asset management software systems are enabling manufactures to proactively reduce unplanned downtime, comply with regulatory requirements, and minimize wear of critical equipment, to cite just a few benefits. Companies can gather data on current and future condition of production assets so that they can make wiser capital investments, while the staff makes better maintenance decisions. By automating and optimizing how critical assets are purchased and maintained throughout their useful life, manufacturers can reap significant costs savings, productivity enhancements and competitive advantage.

Such a system can track critical maintenance and service levels, readings and event-based condition monitoring, provide historical records of maintenance activities, provide regulatory documentation, and help with inventory procurement. For example, manufacturers can coordinate preventative maintenance during planned downtime to help maximize output. The system can also provide intelligence and predictability for maintenance activities by maintaining historical information and performance indicators for product assets. Asset management systems combine business rules with maintenance best practices and tightly integrate into plant-floor and back-office business applications. The technology also enables inventory control and automated procurement, reducing expensive manual purchasing processes.

Consider Ocean Spray, the Massachusetts-based manufacturer of Cranberry food products. Across its entire North American enterprise, Ocean Spray maintains nearly 24,000 production, facility and fleet assets, including fillers, blending systems, conveyors, case packers, high-speed labeling equipment, HVAC units, refrigeration systems and forklifts.

An enterprise wide asset management and service system provides the company with instant access to work order information (including detailed descriptions, parts ordered, receipt due dates and labor and materials usage), which is linked directly to purchase order, vendor, job plan, equipment and labor data.

The systems provide a single source for all relevant  maintenance information, whether users need to monitor the progress of a corrective work order, view upcoming preventive maintenance (PM) events by work location or check open purchase orders. Providing quick and easy access to all information has improved the plants’ asset management procedures, streamlined the creation and filing of POs and made work management processes significantly more efficient.

Having met their basic maintenance goals, the Ocean Spray team improved the maintenance philosophy, and set a goal to increase the amount of proactive maintenance. Accomplishing this goal resulted in a decrease in the number of priority one and two work orders. For example, streamlining proactive maintenance allowed the company’s Henderson, Nev., plant to reduce emergency and reactive work orders from 34 percent to 26 percent. The shift to improve proactive maintenance ensures that Ocean Spray receives as few maintenance surprises as possible, enabling it to avoid expensive downtime.

Uniting all assets
While asset management in manufacturing is not new, the scope and approach has changed. Manufacturing assets include production equipment such as robotic systems, assembly lines, in-house paint, tools, equipment, instrumentation and body shops. But in the new world of asset management, they can also include facility assets such as office buildings and assembly halls, IT equipment like laptops, mobile devices and servers, and fleet or transportation assets such as trucks, fork lifts, automobiles and repair vehicles. It can even include the dispatchers and service providers that facilitate asset maintenance. In other words, any fixed, physical or capital asset that has a direct or critical impact on achieving corporate objectives.

New Web-architected asset management systems are enabling manufacturers to consolidate these once-fragmented, disconnected operating domains into a centrally managed holistic system. The reason: plant assets are, in reality, tightly inter-dependent and function as a single system; so it only makes sense that they are managed as a unified enterprise. To keep manufacturing lines flowing, every asset must be “capable” – always in proper condition to run when needed, and replacement parts readily available.

Maintenance departments need to master a set of core asset management competencies and put in place the required predictive maintenance programs. Asset management systems provide the framework to make the decisions on improvement programs, as well as the right decisions based on corporate objectives. For instance, asset management systems such as MRO Software’s Maximo Enterprise suite provide methodologies through which companies can deploy individual techniques such as Total Productive Maintenance (TPM) and Reliability Centered Maintenance (RCM) to increase asset reliability; Just-in-time (JIT) or Vendor Managed Inventories (VMI) to manage their parts inventories; or Activity Based Costing (ABC) or Zero-Based Budgeting (ZBB) to improve and optimize asset-related costs.

For example, Swedish car manufacturer, Volvo Cars, was able to automate some maintenance methodologies using an enterprise asset management system to reduce production line stoppages while shortening the length of those that do occur. Volvo also wanted to drive down the big-budget maintenance costs of equipment like paint shop robots and the plethora of complex production equipment at its Torslanda factory in Gothenburg, Sweden. Specifically, managers wanted to know where faults were likely to occur during the production of new models. A new car should be rolling off the plant’s assembly line every one minute, 12 seconds. If an unforeseen malfunction in a power tool, for example, stopped the flow, the stoppage would result in lost production that cut deeply into the company’s bottom line. The managers needed to determine, for example, if building a new model in a slightly different way would cause unforeseen and costly production equipment faults. With that information, they could take preventative action and also figure out how to best use labor and materials to perform both preventative maintenance and emergency repairs.

“Volvo has adopted a strategy which is actively seeking out new ways to create value in the company’s production stream by managing assets more effectively,” said the plant’s general manager of maintenance. When a robot or computer, for example, breaks down, Volvo’s asset management system quickly orchestrates the people, equipment and materials needed to fix it based on location, availability and priority. And because Volvo managers could see a map of the critical assets along with their demand for materials, equipment and labor, they now make better informed decisions to optimize the maintenance supply chain.

Asset management systems also help reduce regulatory liabilities. Manufacturers face increasing safety, environmental and operational reporting requirements from Sarbanes-Oxley, FDA, EPA, ROHS, etc., all which swell operational costs and cut into manufacturing margins. Well managed and maintained assets can significantly reduce the risk of incurring highly damaging and costly environmental issues, from pollution to hazardous leaks to dangerous working conditions. They can also help meet a range of regulatory compliance requirements as in the Life Sciences industry, such as the FDA’s Regulation 21 CFR Part 11, calibration standards, and the associated validation procedures specific to FDA-regulated industries.

Occidental Petroleum Corp, for example, needs to adhere to multitudes of safety and regulatory requirements. Failure to comply can result in penalties totaling millions of dollars. After evaluating several technologies to help them improve regulatory compliance, Occidental selected an asset management system to optimize and schedule maintenance and compliance activities. Occidental currently uses MRO Software’s MAXIMO software in the Thums unit in Long Beach, California and Oxy Permian in West Texas.

The Texas One Call System (TOCS) is one of the many regulatory requirements in the state of Texas that the asset management system helps Occidental meet. This requirement involves notifying the state prior to excavation. The regulatory agency researches the area in which Occidental plans to dig and verifies if it can proceed with the project. If Occidental is set to dig, then the agency marks the site and gives Occidental a permit number. The number that the agency provides to Occidental is associated with a work order and job costs in the system.

Occidental’s safety and environment personnel also use the asset management system to manage their inventory of chemicals, and identify hazardous materials with codes and Material Safety Data Sheets (MSDS). Lockout/Tagout procedures are built into the job plans, which also have the necessary permit information noted. For example, to check hazardous gas levels, maintenance personnel need to obtain a confined space entry permit. The requirement for this permit is clearly built into the job plans, and the maintenance professionals immediately know that they must obtain this permit before moving to the next step.

The company’s Oxy Permian’s system comprises six databases, which include Central, North, South, Odessa, Slaughter Gas Plant and Mallet CO2 Recovery Plant. These databases encompass 19 properties. Equipment tracking, associating costs and recognizing the failure of a piece of equipment as it moves throughout a unit, plant and region is critical. The history and performance of assets also needs to be recorded.

Getting 19 properties to agree on a set of business practices was not an easy task; the implementation team had to accommodate the wide range of needs. Based on information from these divisions, the team defined the format that the company would use for all preventive maintenance routines. To enforce this change, all field operations now use handheld devices that allow them to choose from a variety of pre-configured electronic work orders.

“We had different sets of work flow procedures for the field, plant and production operations, and MAXIMO helped streamline these business processes,” said a senior executive at Occidental. “A standard method of completing jobs now allows us to share best practices information company-wide while giving management the information they need to cut costs out of our maintenance routines.”

Manufacturers are increasingly turning to enterprise asset management technology to automate their process efficiency, reduce maintenance, and enhance return on assets. With as much as 40 percent of manufacturing revenues budgeted for maintenance, these savings can significantly contribute to the bottom line. Manufacturers need to tap the wealth of critical data that the technology provides so that no profits are left on the factory floor.

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