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Enterprise Asset ManagementMark GibbisonSAP UK Industry PrincipalLocal 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 PointsTypical Pain Points Key Observations
Capital Expenditure
Disconnected systems not linking critical data between design and purchasing costs
Lack of software tools that would reduce design time and validate proper equipment selection
Lack of data. Not knowing what the life of equipment is and therefore full project life cycle costs
Asset Value/Condition
Incomplete Asset Registers Unknown Value of Assets Unknown condition of assets Limited visibility of depreciation
Operating Expenditure
Lack of visibility of operation data including maintenance costs
Not able to accurately determining whether to repair, refurbish or replace equipment
Enterprise Asset Management Pain Points (Continued)
Typical Pain Points
Key Observations
Asset Utilisation
Lack of timely and accurate preventative maintenance data
Poor, inadequate planning and scheduling data of personnel and maintenance activities
Health, Safety and Environmental (HS&E) Performance
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
Inspection and Calibration Asset Condition Monitoring Mobile Inspection Project Management Redeployment/Disposal Alignment with Business
Strategy
Full Enterprise Asset Management Core Financials Financial Optimisation Capital Investment
Planning
Human Resources Time and Payroll Skills Management
Computerized Maintenance Management Systems
Enterprise Asset Management . . . An Evolution
Asset Registers Asset ValuationsAsset Maintenance Schedules Procurement and Inventory
Enterprise Looks at more than one plant, but is flexible enough to accommodate
local variations Uses standard business practices and KPI's
Asset Focuses on assets and optimization, not just on maintenance Optimizes equipment lifecycle decisions
Management Balances performance, risk, and cost to achieve maintenance excellence Looks at maintenance in a business context to drive company profits
Enterprise Asset Management
EAM – Potential for Cost Savings
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
Downtime costs from lost production outweigh direct maintenance costs by a ratio of 4:1
Maintenance costs have risen 10-15% per year for the past 25 years
NecessaryWasted
Maintenance CostEscalation in the US Key Observations
Source: “Benchmarking Best Practices in Maintenance Management,” Terry Wireman, 2004
0
200
400
600
800
1000
1200
1400
1600
1800
2000
20001979USD in Billions
1990
Asset Management Activity Tracking
Source: Aberdeen Research, Enterprise Asset Management Benchmarking Report, 2003
% o
f res
pond
ents
….organisations are not thoroughly tracking some of their most important maintenance activities, leaving significant untapped opportunity to save operating costs….
Deprec
iation plan
ning
Facilit
y utili
zatio
n
Mainten
ance
planning
Ad hoc ass
et
mainten
ance
Spare part
s
manag
emen
t
Fleet a
ssignmen
t
Component
config
uration
65.5%
EAM – Potential for Cost Savings
0
10
20
30
40
50
60
70
53.6% 49.6% 45.2% 35.3% 26.6% 26.2%
Enterprise Asset Management Business Drivers
Increase asset productivity and speed up repair cycles
Drive continuous improvement through Analytics
Improve visibility and control over expenditures
Enterprise Asset Management . . .
A complex business process
MRO Procurement & Inventory
Asset Maintenance
Financial Optimization & Reliability Reporting
Inspection & Calibration
Human Resources
RFID and Mobile Devices
Asset Health Monitoring
MaterialsRequirements
PlanningProject
Management
Core Financials
EAM – A Complex Business Process
Enterprise Asset Management is a complex operation involving multiple processes, departments, and business partners…
MRO Procurement & Inventory
Asset Maintenance
Financial Optimization & Reliability
Reporting
Inspection & Calibration
Human Resources
RFID and Mobile Devices
Asset Health Monitoring
MaterialsRequirements
PlanningProject
Management
Core Financials
EAM – A Complex Business Process
…… requires a complete business solution for all the important facets of your Enterprise Asset Management operations…...
Middleware
EAM – A Complex Business Process
Middleware
…middleware technology and Enterprise Services Architecture provide an open integration, application, and composition platform . . .
3rd PartySystems
Legacy Systems
EnterpriseSystems
Middleware
3rd Party
Systems
Legacy Systems
EnterpriseSystems
EAM – A Complex Business Process
. . . enabling the only completely integrated, end-to-
end Enterprise Asset Management solution.
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
An EAM should Support . . .
..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
MRO Procurement & Inventory
Asset Maintenance
Financial Optimization & Reliability Reporting
Inspection & Calibration
Human Resources
RFID and Mobile
DevicesAsset Health Monitoring
MaterialsRequirements
PlanningProject
Management
Core Financials
Middleware
OpenIntegration,Application,
andComposition
Platform
A Complete Enterprise Asset Management Solution
3rd PartySystems
Legacy Systems
EnterpriseSystems
Complete Solution Covers all aspects of an asset’s complete lifecycle, including the needs of the maintenance organization…and much more
Scalable Solution Supports local plant views while covering the enterprise’s 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
Enterprise Asset Management Differentiators
An Adaptive Business Network
PLAN
EXECUTE
…enables planning and execution of an optimal enterprise asset management strategy . . .
. . . at the same time empowering you to sense and respond to changes in your business strategy, creating an adaptive and responsive business network.
An Adaptive Business NetworkPLAN
SENSE EXECUTE
RESPOND
ADAPT
Integrated Enterprise Asset Management – Paybacks
Tangible Benefits
Increased planned maintenance 78%
Source: “Benchmarking Best Practices in Maintenance Management,” Terry Wireman, 2004
Reduced emergency work 31%
Reduction on excess inventory 29%
Improved asset availability 17%
Increased maintenance productivity 29%
Average improvement
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 ManagementMark GibbisonSAP UK Industry PrincipalLocal Government, Health and Higher Education