H - AMT Key Concepts

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AMT HandbookKey Concepts


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DOCUMENT DETAILS

Handbook Name Key Concepts

Document Owner AMT Administrator

Frequency As required

AMT Version 8.5D

VERSION CONTROL

Version Date Author Comments

1.0 1/5/2010 iSolutions

8.5D 19/11/2012 D Smith

LEGEND

Handbook Icon Description

Note

Important

Tip / Hint

Warning

Correct

Incorrect

Copyright 2010. All rights reserved.

iSolutions International Pty Ltd.

Suite 201, 6-12 Atchison Street

St Leonards Sydney NSW 2065

Australia

No part of this document may be reproduced, transferred, sold, or otherwise disposed of, without the written

permission of iSolutions International Pty Ltd.


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TABLE OF CONTENTS

1. Introduction ..................................................................................................................................... 4

2.

Life Cycle Costing ........................................................................................................................... 4

3. Equipment Hierarchy ...................................................................................................................... 7

4. Equipment Type .............................................................................................................................. 7

5. Projection Types ............................................................................................................................. 8

5.1 Centreline Equipment Projections ............................................................................................. 8

5.2 Modelling Equipment Projections .............................................................................................. 8

5.3 Real Equipment Projections ...................................................................................................... 8

6. Component Code Hierarchy ........................................................................................................... 9

7. Projected Task ............................................................................................................................... 10

8. Unassigned .................................................................................................................................... 12

8.1 Budgeting & Forecasting ......................................................................................................... 12

8.2 Actual Costs ............................................................................................................................ 13

9. Workorder & Workorder Settlement ............................................................................................ 14

10. Usages & usage profile ................................................................................................................ 15

11. RVIC ................................................................................................................................................ 16

12. Cost Escalations ........................................................................................................................... 16

12.1 Current Projection Actual Costs ........................................................................................... 17

12.2 Current Projection Future Costs ........................................................................................... 17

12.3 Budget Projection Costs to Date .......................................................................................... 18

12.4

Budget Projection Future Costs ........................................................................................... 18

12.5 Alternate Projection Actual Costs and Future Costs ............................................................ 19

12.6 Archive Projection .................................................................................................................... 19

12.7 Centreline Projections ............................................................................................................. 19

12.8 Modelling Estimates (Current and Drafts) ............................................................................... 19

13. Multi-Currency ............................................................................................................................... 20


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1. INTRODUCTION

The purpose of this document is to provide a reference for the user documentation provided to support

the AMT installation. This documentation is in conjunction with the Help File that exists within AMT.

2.LIFE CYCLE COSTING

Life-cycle costing is the process of projecting the costs and productivity for assets over their life-cycle.

For existing equipment this includes the actual costs to date and the forecast costs to the estimated

termination data.

How does AMT do life-cycle costing? In the AMT Projections (see below) user can setup theStrategy Tasks that contain the assumptions that re used to forecast costs. This is also known as the

Maintenance Strategy. The Strategy Tasks can include any type of task such as:

major components

minor components

general repairs

servicing

consumables

Fuel, Tyres, Ownership and Operator costs can also be included.

Example:

Assume 3 years ago you purchased Equipment that consists of one component (Engine) which

was budgeted to last 15,000 engine hours and cost $100,000 to replace. The life of the Equipment

is 40,000 engine hours and you therefore budgeted to change out 2 Engines and have a life-cycle

cost of $200,000 ($5.00 per hour).

You are now at 18,000 Engine Hours and you see that you are $10,000 ahead of budget, but there

was an Engine replaced at 13,000 hours and cost $90,000.

In the chart below the black line represents your initial assumptions (Budget) and the red line your

actual cumulative costs to date.


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Point 1: At 14,000 hrs you were $90,000 behind budget while at 15,000 hrs you are $10,000 ahead

of budget. Nothing actually happened in this period so it is misleading that there is such a big

variance.

If you assume that future Engines will only last 13,000 hrs and cost $90,000 then you will need 2

more Engines and your life-cycle cost will be $270,000 (Last engine will be required at 39,000 hrs).

The blue line shows this forecast.


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Point 2: The variance between your budgeted life-cycle cost of $200,000 and your current

expected life-cycle cost of $270,000 is known as the Projected Cost Variance (PCV) = -$70,000.

This is a key measure in AMT that is calculated for all components (Strategy Tasks) and can be

analysed at the component, equipment, fleet and model level.

If however you assume that future Engines will last 15,000 hrs and cost $90,000 then you will need

1 more Engine and your life-cycle cost will be $180,000 (Last engine will be required at 28,000 hrs).

The dark red line shows this forecast.

Point 3: Each line in the chart represents a Projection in AMT. An Equipment can have many

Projections. This enables users to evaluate the life-cycle impact of different strategy (assumptions).


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3.EQUIPMENT HIERARCHY

4.EQUIPMENT TYPE

There are 3 Equipment types in AMT:

1. Centrelines: These are generic equipment that is used to store standard Projection templates

for a model. It is normally the starting point for registering Real equipment or performing

modelling or feasibility studies.

2. Modelling: These are dummy equipment that has been setup to prepare tenders (OEMs),

perform feasibility studies or benchmark different equipment. A number of equipment can be

evaluated in different modelling scenarios.

3. Real: This is real equipment that is operating. Only Real equipment is enabled for planning and

generating transactional data.


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5.PROJECTION TYPES

Projections house the Strategy Tasks (see below) that are used to forecast costs and drive the planning

process.

For a registered asset, there are a number of different types of Projections depending on the Equipment

Type. While the structure of each Projection is the same, each type of Projection behaves slightly

differently based on its nature.

5.1 Centreline Equipment Projections

Centreline Projection

o Centreline (can only of a Centreline Projection)

o Always assumed to be current

o Cannot have a Start date in the past AMT will update the start date at the start of

each month so scheduled tasks can never become overdue)

o Strategy tasks can be linked to Standard Jobs

5.2 Modelling Equipment Projections

Estimate-Current Projection

o Modelling equipment can only have one Estimate Current

o Represents the latest assumptions

o Can link to Standard Jobs but pricing will not be automatically updated if Standard Job

is changed (so that history is always maintained)

o Enter expected equipment start dates (future or historical) and terms

o Option to escalate costs to todays values or show at original values

Estimate-Draft Projection

o Modelling equipment can only have many Estimate Draft projections

o Enables full version control

o Behaves the same way as Estimate Current

5.3 Real Equipment Projections


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Current Projection

o The live assumptions for an equipment

o Drives the planning and execution of work

o Real time updating for actual maintenance activities (workorders)

o Reflects the real time life-cycle costing for an equipmento Live link to Standard Jobs

o All strategy task costs are escalated to today's values

Alternate Projection

o Used for what-if analyses

o Allows users to play with a copy of the Current projection in a test environment

o Behaves like a Current Projection

Archive Projection

o Allows users to freeze a copy of a Projection

o Contains all the details of a Projection but will not change for anything in the future

o Used to provide an audit trail or reference point

Budget Projection

o For a maintenance contracts, the budget projection usually reflects the commercial

assumptions made to determine contractual billing rates

o Represents original assumptions or company benchmark performance

o Can link to Standard Jobs but pricing will not be automatically updated if Standard Job

is changed (so that history is always maintained)

o Will schedule historical tasks to when they were expected to occur (so they do not

become overdue). Therefore the projection flexes will utilization (it is not a date based

accounting budget)

o Will escalate historical costs to the date they were expected to occur called escalating

costs over time

o Not impacted by actual occurrences, only utilization

6.COMPONENT CODE HIERARCHY

In order to allow greater flexibility in reporting and analysis, AMT has a 4-tiered component code

hierarchy. These are setup in the System tables and are automatically applied when the user selects a

Component Code.


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One subsystem in the component code hierarchy will be flagged as the default; any new component

codes received by AMT through interfaces will be automatically allocated to the default subsystem.

Editors in AMT allow the user to manipulate the component code hierarchy, such as adding or

moving systems/subsystems/component codes.

7.PROJECTED TASK

An AMT Projected Task is a specific maintenance task which is forecasted to occur periodically over the

life cycle of the equipment.

Both Projected Tasks (and workorders) are uniquely defined the combination of 4 codes: ComponentCode, Modifier Code and Task Type and Task Counter.

Component Code reflects what is being worked on / forecast (e.g. HCYL Hoist Cylinder)

Modifier Code: used to provide an additional identification to the Component Code (such as thecomponent's location on the machine, e.g. Right, Left, Upper etc)

Task Type: it is a code and description combination that identifies what is to happen at anoccurrence the task (e.g. CC Component Change out, GR General Repair)


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Task Counter: defines the sequence by which a Task is performed, e.g.

o C220.RR.CC.1 (First/Freq 15,000 until 30,000hrs) reflects a Remanufacturer Strategy

o C220.RR.CC.2 (First 45,000hrs Freq. 15,000) reflects a Rebuild Strategy

o Note: most Tasks do not use the Task Counter (it is set to zero, i.e. C200.RR.CC.0)

Projected Tasks can be for a variety of activities

Component Change outs

PM Services

Inspections

General Repairs

Unscheduled/Miscellaneous work (i.e. provision for costs)

Projected Tasks that are contained in the Current Projection are called Strategy Tasksbecause theyare repetitive strategic maintenance activities, which typically require

Budgeting

A Maintenance Strategy

Standard Job(s)

Parts, Rotable Components and Costs to be forecast

Long-term Planning (e.g. in order to consider lead times)

Short-term Planning (e.g. resources, location, support equipment)

The structure of a Strategy Task in a projection is pictured below.

Each Strategy Task can have a multiple Jobs and each Job has a cost, which is split into Parts, Labour

and Miscellaneous. The user can manually enter the costs into each of these categories, or the user

can link the Job to a Standard Job.

Standard Jobs can only be linked if the Standard Job module of AMT has been implemented, and

if so, users should refer to the Standard Jobs handbook for more information

Jobs

Jobs Standard Jobs

Strategy Task


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8.UNASSIGNED

AMT has a concept called Unassigned. It is a mechanism for

Budgeting for general repair costs, at the subsystem level, in order to complete a full life cycle

costing model

Grouping actual costs for non-strategy tasks into subsystems for the purpose of high-level cost

reporting

8.1 Budgeting & Forecasting

In order to create a full life cycle cost budget/model, one needs to consider not only the big ticket items

(i.e. major component changeouts, services) but also the smaller usually more frequent general repairs.

Of course, it would be impractical to budget for every type of repair that can be done; i.e. one does not

want to create a strategy task for every type of repair. Rather, one would prefer to budget for general

repairs on electrics, general repairs on hydraulics, general repairs on the body and frame.

The mechanism in AMT used to budget for such general repairs is called Unassigned. AMT

automatically creates, in the background of each projection, Unassigned budget lines for every

subsystem which exists in the Component Code Hierarchysystem table. These lines will remain

dormant until such time as

a) the user elects to include one in a forecast by assigning it a frequency and cost estimate and/or

b) an actual cost is incurred for a non-strategy task (see next section for an explanation for actual

costs and unassigned).

An Unassigned task in a projection has the following codes

Component Code: Zxxx Subsystem - Unassigned (e.g. Z011 Wheel & Tyres Unassigned)

Modifier Code = default modifier code (e.g. 0)

Task Type = UN Unassigned

Task Counter = default task counter (e.g. 0)


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Z codes are managed dynamically by AMT (e.g. if you add a subsystem to the Component Code

Hierarchy, in the background AMT will create an Unassigned task with a Z code for it)

Z codes cannot be created or changed in the frontend by a user

8.2 Actual Costs

If AMT has a workorder settlement where the codes on the settlement do not match a strategy task (for

the same equipment) then AMT has to decide where should this workorder cost go. It cant go against a

strategy task so where else can it go?

So in this case, what AMT does is look at the component code of the workorder settlement, and then it

searches through the Component Code Hierarchyto identify to which subsystemthe component code

belongs. If the component code is found in the Component Code Hierarchy, AMT links the workorder

the parent subsystem.

The subsystem is represented in a projection as

Component Code: Zxxx Subsystem - Unassigned (e.g. Z011 Wheel & Tyres Unassigned)

Modifier Code = default modifier code (e.g. 0)

Task Type = UN Unassigned

Task Counter = default task counter (e.g. 0)

If AMT receives a workorder settlement, where the component code on the settlement is new to

AMT (and therefore does not exist in the component code hierarchy) AMT will insert the new component

code into the default subsystem in the component code hierarchy (one subsystem is flagged as being

the default), and then the workorder settlement will be linked to the default subsystem.

Even though a workorder is linked to unassigned, the workorder will still maintain its original coding and

will keep its original identity (i.e. the workorder will still be seen in Workorder Settlement Manager,

Shiftlog, Planningetc with its original codes). It will not have a Z component code nor a UN task type.


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Rather, in high-level cost reports, which only show strategy tasks and unassigned, the workorders costs

will be included in the unassigned .

Workorders should not be coded to Z unassigned component codes

The Task Type UN should only be used for Unassigned tasks in a projection, it should not beused when creating workorders

When AMT reports Component Life of an unassigned workorder, the life reported is calculated

from the last time a workorder settlement was linked to the same Unassigned Task (e.g. Z011 Wheel

& Tyres Unassigned). In other words, just as a strategy tasks life is calculated from the lastworkorder settlement to link to the same strategy task, an unassigned workorders life calculation

follows the principle. An unassigned workorders life is not calculated from the last time there was an

unassigned workorder with the same codes.

9.WORKORDER & WORKORDER SETTLEMENT

Therefore any time an equipment stops for maintenance there is a workorder, regardless of whether

there were costs incurred.

For example, operator stops the truck because of low power, the service supervisor instructs him to

keep operating as its coming in for a service next day. Even though there was no job performed there

will be a record of the stoppage in a workorder.

The workorder settlement, which is linked to a workorder, principally captures the accounting costs of

that workorder. However, not all workorders may have a Workorder Settlements (as with the example

above).

Workorder Workorder Settlement

Engine Change out Yes Specific (1 to 1)


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Miscellaneous repair Yes Monthly workorder settlement

Maintenance stoppage no cost Yes No workorder settlement

Due to the fact that not all installations use the AMT Planning and EQS modules, it is the workorder

settlement that updates the AMT strategy, not the workorder

If a workorder settlement is linked to a workorder then the workorders details (codes and job date) will

over-ride the workorder settlements details

10. USAGES & USAGE PROFILE

UOM(Unit of Measure) refers to any cumulative usage related to equipment such as Machine Hours,

Fuel Litres, Kilowatts and Tonnes. These are also referred to as Usages in AMT. These are used to:

1) Drive maintenance schedules: For example, an Engine might be scheduled of Fuel Litres. In theStrategy Task users can select the UOM appropriate for that equipment

2) Forecast productivity: For example Tonnes moved can be setup as a UOM. This can then beused to forecast production

Usage Profiles enable the user to:

setup a profile for the usage rates/utilization for groups of equipment

setup relationships between the Usages (i.e. Tonnes is a dependency of Engine Hours)

vary the usage rates over time to reflect the changing operating conditions (i.e. deeper pit, rainy

season, winter etc)

The example below shows a Usage Profile with a hierarchy of Usages.


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Other points

Usage Profiles enable users to setup the application severity. For example, if the pit in a mine

gets deeper then the fuel burn rate will increase and Engine life will decrease.

actual usages can be captured in AMT and plotted against the Usage Profile

Usage Profiles are optional for Equipment. Users can elect to either have no usage measure for

an equipment (all strategy tasks are then date based) or apply a Simple Utilisation where one

UOM is selected and one utilization rate set (i.e. 4,000 Engine Hours per annum)

11. RVIC

RVIC (Residual Value In Components) is a key concept in AMT that is used to identify risk and

opportunities and forecast optimal equipment replacement points.

RVIC measures the projected % life remaining in a component at its forecast termination point.

In the example below a component is scheduled for 44,000hrs then 60,000hrs. If the equipment is

due to be scrapped at 48,000hrs then at that point there is 75% of life remaining in that component.

If it is a large component like an engine then it highlights that it is not a good time to be scrapping

the equipment. Alternatively there is a large saving to be achieved if the engine l ife can be extended

to 48,000hrs.

RVIC is shown in the High Opportunity and Risk reports, component change out schedules and

equipment termination reports. It is also used in the MARC financial reports to predict contract margins.

12. COST ESCALATIONS

Cost escalations are entered into the EscalationEscalationEscalationEscalationsystem table.

Escalation % can be entered for any date by Labour, Miscellaneous and Parts Supplier categories.

Refer to System Administration Handbook


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Escalations are applied to all equipment you cannot escalate costs for one fleet differently to another.

How escalations are applied in AMT depend on the Projection and the analyses being performed

12.1Current Projection Actual Costs

As a general rule, for all reports in AMT actual costs are never escalated. This includes all financial

reports.

However there are exceptions where the actual costs are escalated to todays value. These are for

cases where average cost analyses and benchmarking are performed. The forms/reports where this

occurs are:

Average Workorder Costs Fleet Component Perf. Summary

Strategy Task Analyser Technical Perf. Analysis Technical Perf. Analysis Chart Technical Performance Details

In some other forms the user has the option to view actual costs as escalated (to todays values) or un

escalated.

12.2Current Projection Future Costs

All future costs from the Current Projection use costs escalated to todays values. These costs are

entered into Strategy Tasks and have a Pricing Date nominated in the Strategy Task. These costs are

escalated from this date to today.

Example: On 1 Jan 05 a user enters a cost of $1,000 for a Strategy Task. If there is a

5% escalation on 1 Mar 05 and the user runs a forecast report on 1 Jun 05 then the

forecast will use $1,050 for the forecast cost for that Strategy Task.

Where a Strategy Task is linked to a Standard Job then the program assumes the Standard Job pricing

is always up-to-date and no escalation is applied.

All future costs are forecast at todays values. It is incorrect to enter future escalations

into AMT


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12.3Budget Projection Costs to Date

The costs entered into the Budget Projection have a Pricing Date which sets the point from which they

are escalated. For the Budget Projection the Pricing date is set at the Projection Header form and

applies to all Strategy Tasks.

The general principal is that Budget Costs are 'escalated over time'. This means that the costs are

escalated to the point that they were budgeted to occur.

Example: For the Engine on Truck 1 assume:

Budget Pricing Date - 1 Jan 03 Term = 25,000 hours Engine Strategy Task : Cost = $100,000 at frequency of 10,000 hours Truck reached 10,000 hours on 27 October 2004 Escalation history

o 5% on 1 Dec 03o 3% on 1 July 04o 4% on 1 Jan 05

If the user runs the Life cycle cost report on 1 May 05 then it will show:

Budget Costs to date: $108,150 (5% + 3% cumulative) Budget Future Costs: $112,476 (5% + 3% + 4% cumulative)

However there are exceptions where the actual costs are escalated to todays value. These are for

cases where average cost analyses and benchmarking are performed. The forms/reports where this

occurs are:

Strategy Task Analyser Fleet Component Perf. Summary

In some other forms the user has the option to view actual costs as escalated (to todays values) or

unescalated.

12.4Budget Projection Future Costs

All future costs from the Budget Projection use costs escalated to today's values. These costs areentered into Strategy Tasks and have a Pricing Date set in the Projection Header.

See example above for Budget Project Actual Costs

Where a Strategy Task in the Budget may be referenced to a Standard Job it is not linked to the

Standard Job. Therefore it will not update the cost in the Strategy Task. This ensures the Budget never

changes.


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All future costs are forecast at todays values. It is incorrect to enter future escalations into AMT.

12.5Alternate Projection Actual Costs and Future CostsThe same rules apply as for the Current Projection.

12.6Archive Projection

Archive Projections are created from Current, Budget or Alternate Projections. Once created the Archive

Projection will never change. Therefore they reflect the rules applying to their source Projection at the

time they were created.

12.7Centreline Projections

Centreline Projections only forecast future events/costs. There is no historical element.

All costs from the Centreline Projection use costs escalated to todays values. These costs are entered

into Strategy Tasks and have a Pricing Date nominated in the Strategy Task. These costs are escalated

from this date to today.

Example: On 1 Jan 05 a user enters a cost of $1,000 for a Strategy Task. If there is a 5%

escalation on 1 Mar 05 and the user runs a forecast report on 1 Jun 05 then the forecast

will use $1,050 for the forecast cost for that Strategy Task.

Where a Strategy Task is linked to a Standard Job then the program assumes the Standard Job pricing

is always up-to-date and no escalation is applied.

All future costs are forecast at todays values. It is incorrect to enter future escalations into AMT.

12.8Modelling Estimates (Current and Drafts)

The same rules apply as for Budget Projections


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13. MULTI-CURRENCY

AMT fully supports multiple currencies. Many reports can show financial amounts in any currency,

transactions (eg. Workorders, Billings) can be imported into AMT in any currency and if external

systems provide the exchange rate to AMT it will be used, otherwise AMT uses a table of historical

exchange rates.

The following data can be maintained in multi-currencies

Standard Jobs

Strategy Task Jobs (can also be linked to a standard job in different currencies)

Projected billings

Costs (Workorder Settlements)

Billings

In the system tables the user maintains the exchange rates from all currencies to the Default Currency

(i.e. on a monthly basis enters the latest exchange rates).

For actual costs and billings transactions the exchange rate at the time of the transaction is recorded

(usually imported from the ERP as part of the standard interface routine). That transaction specific

exchange rate is what is used for converting amounts between currencies.

Documents

H - AMT Key Concepts