with VDM Inside - Work & Enterprise Asset Management ... · Discover The Hidden Value Of Maintenance with VDM Inside Mark Haarman Managing Partner Mainnovation Aberdeen, June 1st

Discover The Hidden Value Of Maintenance

with VDM Inside

Mark HaarmanManaging Partner MainnovationAberdeen, June 1st 2011

Contents

1.Understanding

Value OfMaintenance

2.MeasuringWith KPIs

& Benchmarks

4.In Control With

Cognos|VDM Inside

3.Improving With

Process & Maximo Best Practices

Maintenance Dilemma

• The Board considers Maintenance as being highly important

• But treats it as a cost center or necessary evil

• Maintenance is not able to convince the Board of real value

• Maintenance and Board do not speak same language

• Risk of bad decision making in maintenance & asset management

Value Driven Maintenance

• VDM is developed by Mainnovation in close cooperation with leading maintenance organizations from different industries:

• Oil & Chemical

• Food & Drink

• Paper & Pulp

• Pharma

• Offshore & Marine

• Rail & Ports

• VDM makes the economic added value of maintenance quantifiable and supports the priority setting

• VDM facilitates the development of the Most Valuable Maintenance Organization (MVMO)

• It makes maximum use of proven best practices and is fully embedded in Maximo and Cognos

Definition of Value

Present Value =(PV)

r = Opportunity Cost of Capital (discount rate or hurdle rate)

Net Present Value = C0 +(NPV)

C0 = Cash flow at year 0

The sum of all free future cash flows, discounted to today

Value =

∑Ct

(1+rt)tNet Present Value = C0 +(NPV)


∑Ct

(1+rt)tNet Present Value = C0 +(NPV)


The sum of all free future cash flows, discounted to today

Value =

VDM Formula

FSHE,t x ( ∆CFAU,t + ∆CFCC,t + ∆CFRA,t + ∆CFSHE,t)∑ - -

(1+rt)tt = 0 -> n

Value Opportunity* =

Note: The VDM formula is a tool to prioritize between the different value drivers!

It determines the dominant value driver.

Value

Value

ValueValue

Safety, Health& Environment

ResourceAllocation

AssetUtilization

CostControl

Value Of Maintenance

Case-IFF

Value

Value

ValueValue


ResourceAllocation

AssetUtilization

CostControl

• Leading company in flavors and fragrances

• European production centre in Netherlands

• Company data:

• Replacement asset value = € 105 M

• Technical availability = 87%

• EBITDA = € 40 M

• Maintenance costs = € 2.8 M

• SHE-factor = 1.0

• Value MRO inventory = € 1.1 M

€ 0

€ 12 M

€ 1 M

€ 50 M

Contents

1.Understanding

Value OfMaintenance


& Benchmarks

4.In Control With

Cognos|VDM Inside

3.Improving With


Value Drivers

Value

Value

ValueValue


ResourceAllocation

AssetUtilization

CostControl

Maintenance Competences Model

Safety, Health& Environmentmanagement

AssetUtilization

CostControl

Maintenancebudgeting

Equipmentperformance

planning

Lossanalysis

Costanalysis

Lossregistration

Costregistration

MRO supply chain management Skill & tool management

Service supply chain management Equipment knowledge management

Reliability engineeringReliability engineering

Planning & preparationPlanning & preparation

Maintenance executionMaintenance execution




Measure Performance With VDM Control Panel

Benchmark Performance

12

“Apples with Oranges”

Industry Averages

Case - DSM

• Leading company in life sciences and high performance materials

• Over 100 plants worldwide

• 2003: VDM Audit showed that dominant value driver = Cost Control

• VDM Control Panel with 14 KPIs

• Internal and external benchmarking

• Standard work processes and EAM (Maximo/SAP) based on identified best practices

• 2007: 25% cost reduction (= 35M EUR per annum) without jeopardizing SHE and Asset Utilization

• Some plants are now shifting focus to Asset Utilization!

Contents

1.Understanding

Value OfMaintenance


& Benchmarks

4.In Control With

Cognos|VDM Inside

3.Improving With


Know Where To Improve

16


AssetUtilization

CostControl



planning

Lossanalysis

Costanalysis

Lossregistration

Costregistration









Improve With Proven Best Practices

RCM

Gatekeeping

Operator Maintenance

OEE

Asset Based Budgeting

Condition Monitoring

Risk Based Inspections

TPMCost Driver

Analyis

Be Carefull With ‘Throwing’ Best Practices


AssetUtilization

CostControl



planning

Lossanalysis

Costanalysis

Lossregistration

Costregistration









Translate Strategy Into Work Processes

19

1.1Plan

equipmentperformance

1.2Monitor

equipmentperformance

1.3Analyze

performancelosses

2.1Manage

PM strategy

2.3Manage PM

schedules andtask lists

2.2Identify

critical spares

2.4Evaluate

PMstrategy

3.1Collect

maintenancerelated SHE-legislation

3.2Translate SHE-legislation inPM strategy

3.3Measure

SHE factor andperformance

4.1Budget

maintenancecosts

4.2Monitor

maintenancecosts

4.6Claim

damages

4.3Analyze

maintenancecosts

4.5Claim

warranties

5.2Prepare

work orders

5.4Schedule

work orders

5.3Manage

work permits

5.5Issue

work orders

5.1Receive

notifications

5.6Manageproject

6.1Execute

maintenance

6.2Register

work orderresults

7.7Create

purchaserequests

7.8Review

proposals

7.10Send

purchaseorders

7.11Match

invoices

7.12Manage

suppliers

7.9Manageframe

agreement

7.2Monitor

inventoryvalue

7.1Receive andstock spares

7.5Manage

catalogue

7.6Transport

spares

7.4Count

inventory

7.3Issue spares

8.1Develop

outsourcingstrategy

8.2Supervisecontractor

9.1Manage

Skill profiles

9.2Managepersonal

certificates

9.3Manage

workforcecapacity

9.4Register

10.1Manage

equipmentdata

10.3Manage

drawings andmanuals

10.4Collect real

time condition data

10.2Manage

equipmentpermits

9.5Calibrate

tools

4.4Issue

investmentrequest

Align Maximo And Organization

!  !  !  !  !  ! 

Case - Volvo Cars

• Volvo manufactures cars in 5 plants

• Famous maintenance organization (TPM)

with focus on up time

• In 2005 need for more balanced

maintenance strategy > VDM

• Multi site implementation of standard VDM processes and KPIs supported by

Maximo

• In 2009 maintenance budget was reduced

with 50% !

Contents

1.Understanding

Value OfMaintenance


& Benchmarks

4.In Control With

Cognos|VDM Inside

3.Improving With


Know Where You Are!

23

VDM Leads To Continuous Improvement

Case - Port of Antwerp

• Second largest port of Europe

• 600 maintenance employees

• Need for cost transparency and standardization

• Implementation of VDM processes and Maximo

• VDM Control Panel developed in Cognos

• More than 100 KPIs and drill downs with data from Maximo

Summary IBM Cognos | VDM Inside

• Standard product Mainnovation

• Preconfigured maintenance dashboard with over 100 (K)PIs and drill downs

• Data retrieval from IBM Maximo

• Based on standard IBM Maximo functionality

• Built in IBM Cognos technology

• Flexibility to customize (K)PIs and drill downs

• Contains Asset Based Budgeting Module

Discover The Hidden Value Of Maintenance

Documents

with VDM Inside - Work & Enterprise Asset Management ... · Discover The Hidden Value Of Maintenance with VDM Inside Mark Haarman Managing Partner Mainnovation Aberdeen, June 1st