Don't let individual sites deviate from the CMMS solution

David Berger says companies stand to lose a lot by allowing individual sites to deviate from an enterprise-wide CMMS solution.

By David Berger, P.Eng., contributing editor

There’s more to buying technology than simply knowing which package has the most bells and whistles. Features and functions are important in determining the best package, but they must align with the needs of the entire organization. Indeed, vendor demos are helpful for seeing first-hand what a package can and can’t deliver, if and only if you’re fully prepared. This means involving key stakeholders in assembling clearly defined, enterprise-wide requirements and importance weightings for each criteria and demo test scripts, where appropriate. The test scripts are essential for the vendor to demonstrate key functionality, using your procedures and sample data.

In this way, you’ll focus on technology that maximizes benefit to the entire enterprise, not just one business unit, department, functional area, location or individual. All too often companies miss out on significant benefits by thinking in silos. One of my favorite examples of this mistake is when you ask a maintenance manager of one site what he thinks of standardization across the enterprise, such as part numbering schemes, formulae for performance measures, priority codes or equipment hierarchy. The typical response is something like, “We agree that standardization across the enterprise is critical … as long as you standardize based on what we’re using.” Thus, building consensus around enterprise thinking is more difficult than it might first appear, but the rewards are substantial.

Procurement: consider consolidation

A key area of benefit for enterprise thinking is consolidating the purchasing function for shared parts, components, equipment and services. The theory is that negotiating master contracts with vendors incorporates the economies of scale of multiple sites and should result in lower overall costs on goods and services, as compared with the sum of individual sites trying to go it alone. Furthermore, duplicating the purchasing function at each site for those vendors that have enterprise-wide relationships is more costly and time-consuming than a centralized approach.

Start with Pareto analysis to determine which vendors account for the greatest dollar expenditure across the enterprise, and prepare a history by site including vendor costing, volumes and performance. This baseline is essential to negotiating a better deal on behalf of every site.

Although the company benefits overall, the dark side of enterprise-wide procurement is the risk that sometimes one or even a few sites might be faced with higher prices or decreased service levels under a corporate solution. Perhaps the site has developed an extraordinary long-term relationship with a local vendor that has negligible travel costs, produces large enough volumes to ensure low costs, is close to cheap labor and raw materials, and so on. However, allowing one or more sites to opt out of the corporate solution might reduce overall volumes enough so that the corporate solution no longer provides sustainable savings. This is yet another example of how something that benefits the enterprise might not benefit a given site.

Plan and schedule to level loads

From long-term planning to short-term scheduling, enterprise thinking can pay dividends. It starts with capacity planning for assets, components and spare parts. Savings stem from optimizing the placement of assets and parts inventory relative to customers, suppliers and available workforce skills. In turn, this reduces transportation costs, reduces inventory levels and improves capacity utilization, yielding fewer overall assets, maintenance technicians and operators.

In the medium to short term, enterprise-wide considerations can facilitate planning and scheduling for production and maintenance. This includes ensuring another site picks up the slack when a given plant experiences major downtime – planned or otherwise. As well, parts can be sourced from other sites or shared storage facilities rather than having extensive duplication of inventory at each location. Finally, orders can be accepted, costed and scheduled in the appropriate location based on availability.

Share asset know-how

Managing and maintaining your assets is far more effective when information is collected and shared across the enterprise, as opposed to each site acting independently. Repair/replace decisions, for example, based on equipment history and life cycle analysis covering the entire enterprise have greater statistical significance. It also improves your bargaining power during the procurement cycle. But the difficulty lies in ensuring that each site uses the same equipment hierarchy and numbering scheme, and collects maintenance cost data in the same manner and to the same level of detail, regardless of whether outside contractors are used.

The other benefit to enterprise thinking is the sharing of asset-care policies, procedures and standards. Examples are developing PM procedures and standards, failure codes, equipment criticality definitions, standard repair procedures, predictive technologies including type and frequency of data collection for which assets, and many other opportunities for standardization and knowledge sharing.

Enterprise thinking facilitates not only the consistent tracking of asset-related costs and key performance indicators across the organization, but feeds them and real-time asset condition information to higher-level decision-support systems for determining day-to-day equipment and capacity availability.

Converge on technology

Companies stand to lose a lot by allowing individual sites to deviate from an enterprise-wide CMMS solution. CMMS packages are feature-rich and flexible enough to accommodate a range of needs demanded by the many locations and stakeholders of even the largest multinational companies. Benefits of standardizing on a single CMMS package include:

  • It’s more efficient and less costly to develop requirements and purchase a single CMMS for the enterprise, rather than each facility duplicating this effort.
  • It’s easier and faster to implement at each site as the corporation amasses experience.
  • It’s easier to establish procedures, numbering schemes, coding structures, reports and data entry forms because everyone has the same software for loading and sharing standard data.
  • It requires fewer resources overall to support and maintain the system (eg, can justify using internal resources for first-line support).
  • It facilitates the sharing of best practices in how best to use and get more out of the system.
  • It’s easier to upgrade, especially when considering integration and compatibility issues with corporate systems such as HR, accounting and GIS.

Pass around the people

People are quite mobile within a modern corporation. Enterprise thinking provides greater flexibility in moving them around because they’ll be familiar with the standardized procedures, reporting, CMMS software and so on. As well, enterprise thinking includes standardizing on and sharing employee data, such as skills inventory, certifications, training schedule, work experience and demographics, so that human resources can be managed more strategically.

Share social responsibility

As the business world continues to focus attention on corporate social responsibility, enterprise thinking will facilitate the mining of opportunities for reduced energy consumption, reducing carbon emissions and other green initiatives. Standardized programs can be implemented, and the CMMS can track results consistently across multiple sites.

Benchmark your buddies

Another key benefit to enterprise thinking is the ability to create an atmosphere of friendly and healthy rivalry between sites through internal benchmarking. This is made possible by establishing consistent procedures and measures, collecting data in a consistent fashion at each site, reporting on results in a timely manner, and analyzing any gaps for sharing lessons learned. The result: The organization adopts a culture of continuous improvement, striving for higher and higher levels of productivity within each facility and across the enterprise.

(Editor’s note: The Plant Services CMMS/EAM Software Review, posted at www.PlantServices.com/cmms_review, provides a side-by-side comparison of more than a dozen popular software packages.)

E-mail Contributing Editor David Berger, P.Eng., partner, Western Management Consultants, at david@wmc.on.ca.

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