From the plant floor to the executive floor

April 5, 2011
Build a case for smarter maintenance through enterprise asset management.

We know that a stitch in time saves nine, and that translates to saving millions in manufacturing plants. Take this scenario: A maintenance technician uses a new thermographic camera to check for hot spots on electrical connections. When one connection looked suspicious, he initiated an inspection work order to follow up on the findings. As the connection point was traced back through the plant, the crew discovered that vibration loosened a connection on the main power feed to the building and a complete loss of power was imminent. During the weekend the plant manager adjusted the production schedules while parts and skills were aligned to make the repair, averting the potential for losses in the millions of dollars.

Given the recession and volatile energy and commodity prices, manufacturing companies must avert disaster. It’s the table stakes to compete in the global economy.

But is that good enough?

Smarter maintenance has evolved to become more nuanced to not only avoid failure but to optimize plant assets in every way. Plants now apply a more scientific approach to maintenance, repair and overhaul (MRO) to decide the right work on the right assets by leveraging data to establish solid processes and well-defined response plans. The resulting intelligence can drive more evidence-based business decisions and contribute to the bottom line. On average, enterprises that optimize workforce performance save about 10% on maintenance staff budgets while increasing job security of the staff.

To win competitively, many plant managers are looking to enterprise asset management (EAM) as a critical business system platform on which to base their decisions.

Building a foundation for EAM

EAM is simply a process that gives insight into assets, their condition and work processes through the collection of data for better planning and control. With EAM, maintenance professionals can identify potential problems before they occur and use data to identify more efficient operations, fostering greater alignment of the maintenance organization’s goals with overall business objectives.


Although everyone in the plant wants the assets to function properly, there are some conflicting objectives afoot. For maintenance managers, the goal is to minimize asset downtime and respond to changing operating conditions before problems arise. For production managers, the goal is throughput, sometimes at the expense of the asset’s life.

In addition to aligning objectives for assets, another factor might exist: it’s hard for maintenance technicians to access important data to pursue smarter asset maintenance. This is most often the result of disconnected systems that different departments might have produced to support their individual work efforts. Data needs to be culled from across the plant and across divisions for a single view of the truth.

Asset relationships matter

Any maintenance manager can tell you which equipment on the plant floor causes the most downtime pain. But when it comes to effectual downtime — a breakdown or problem related to other equipment connected to the whole system — it can be much harder to identify. That’s why it’s critical to understand component relationships to better identify key assets. The relationship of one asset to another might be determined by a custom recipe for each customer order or it might be standard according to the model being produced. In either case, the subcomponents must be understood in the context of how they work together. These relationships also should include “soft” components — the lines of software code. Because these soft components control each asset, they’re important factors in uptime and equipment performance.

Once the asset relationships are understood, you can determine the approach to maintaining it, based on how critical to the operation something might be. Rating relative importance of the asset is a key factor to supporting advanced management strategies. Ranking order then determines the level of focus the team gives on improving productivity.

Monitoring of key assets

You don’t have to look farther than the 2010 oil spill in the Gulf to understand, in certain industries, some assets are so important they warrant specialized applications to manage and monitor complex processes. Automatic valves can be monitored at will for response to test system readiness, for instance. Because EAM solutions have been evolving for decades with increasing focus on precise vertical industries and deep capabilities that align with each industry’s specific needs, platforms to manage this type of visibility are readily available at a relatively low cost. This is especially true when it comes to interconnecting monitoring systems. Open standards have driven down the cost of implementing such things, making them available and sustainable for a larger group of enterprises.

Analyzing the data delivers insight

Tracking physical asset condition and history on a timely basis generates large volumes of data. Analytical tools help extract data set features and characteristics to turn them into useful information. For example, predictive analytics can reveal the state of the equipment and any correlation between failure type and states of readiness. These answers present opportunities to connect the disparate dots. Predictive analytics can help put in place measures to ensure asset health because it can identify potential problems, periodically or in real time, before they degrade the process or lead to catastrophic failure.

Connecting maintenance to revenue

These intrinsic EAM qualities provide plant professionals with real-time visibility into asset health, visibility that can increase revenue and decrease costs, leading to a quick return on investment (ROI) and, ultimately, maximized shareholder value. It’s crucial to take into account asset performance as a whole by total contribution, not just by maintenance costs. The effect of asset performance can be truly understood only in the context of the role it’s expected to serve. In the example of the power feed to the plant, the effect of such a loss is catastrophic, whereas, loss of the lift used to maintain it is less critical, a back up is easily obtained at a relatively low cost.

The true cost of the asset can be measured through a full evaluation of the risk of its loss of service based on its importance to the organization’s mission. Other factors related to the cost to maintain the equipment, such as labor and inventory resources, can be optimized in accordance to the ranking of each of the assets.

Labor: In this time of economic austerity, it becomes even more critical to optimize the workforce’s maintenance and repair time. Lack of planning, visibility and supplies erode labor efficiency. If work assignments are ambiguous or unplanned, then resources can wait for assignments, or find themselves consumed by inappropriate tasks. When a crisis occurs, such as an asset breakdown, overtime ensures that the plant is again up and running as soon as possible. With the lack of visibility into asset status, there tends to be repeated calls for the same problems and a subjective analysis of the situation. Information isn’t updated on a timely basis for descriptions, progress, status or parts availability.

A smarter maintenance strategy restores focus on value-added activities, which put more efficient processes, systems and structures into place, providing the business with optimum asset reliability at minimum cost. Technology platforms help manage smarter labor strategies by providing resources with real-time asset information that aligns structures and roles with plan-based strategies, ultimately eliminating wasted labor.

This model increases the amount of work accomplished while decreasing labor costs.

Inventory: A number of factors can lead to inefficient inventory planning. These range from complex business transactions, such as acquisitions or divestitures, to poor storeroom planning, sourcing problems and employee uncertainty. Whatever the cause, inventory reductions often deliver a high dollar return, which is easy to quantify because it’s physical in nature. But it’s not enough merely to reduce inventory. Inappropriate or incorrect reductions can have detrimental results. A smart approach to inventory management is necessary to achieve the desired results without producing risk. Using EAM technology to apply a sound inventory management strategy is a good place to start.

For example, EAM provides data about asset operation and condition, allowing staff to develop preventive maintenance schedules, thereby producing more accurate prediction for parts and inventory needs. For parts that aren’t used very often, deeper analysis can weigh the true risk of not having the part on hand versus the cost of keeping more material in the stores.

With these techniques in place, the right parts will be available for the right equipment at the right time, and not before they’re needed, resulting in improved service levels and customer satisfaction. Additional benefits that might be measured include:

  • Deferred asset replacement, resulting in lower capital investment
  • Improved maintenance staff efficiency results in labor cost avoidance
  • Reduction in maintenance, repair and overhaul (MRO) inventory
  • Improved MRO strategic sourcing strategies
  • Reduced setup and reconfiguration costs

Connecting plant floor to executive floor

While it’s true that management support and direction is fundamental to an organization’s overall asset management strategy, without the contributions of the maintenance team, it can’t be successful. Of all the company staff, the maintenance professionals undoubtedly have the best visibility into the current state of the plant’s operations and asset health. Tapping this rich source of information is critical to the success of any program.

To engage and provide direction about how to best execute organizational goals, plant maintenance professionals should take certain steps to raise the matter of EAM to business leaders and decision makers.

Establish a vision and determine the end goal for the organization. Production and maintenance should have clear criteria for how each asset should perform and establish rules of engagement to determine the level of service dedicated, based on the strategy for each — run-to-failure, inspection-based, operator-based, condition-based. In this way, the organization can ensure that critical equipment — a precious resource — is used in the most efficient manner.
Assess where the organization is today and where it can go in the future. Any good process is based on the need to support the organization’s overall mission. Gaps or shortfalls in these goals, as established in the first step, present an opportunity for improvement.

The business case for the effort necessary to establish common standards is contained in this statement: Each gap or shortfall costs money, affects quality, decreases productivity or all of the above. Measuring each situation could be as simple as an anecdotal review of how often something occurs applied against the relative cost of each event. The measures then give insight about which specific components are the major offenders. Examples of these include:

  • Number of times per week that critical equipment fails
  • Average duration of failure
  • Average cost of production loss for this asset
  • Number of times per day/per week stock out situations happen (when parts are not available for trades who come to the window)
  • Average time spent at the parts window
  • Average labor burden rate for the site.

Extrapolate these examples across the organization to get the mathematical data that can help build a business case. These examples and others like them provide tangible, quantitative, measurable calculations to value the strategic maintenance strategies and the platform to support them.

When an organization can raise smarter maintenance from the plant floor to the executive floor, having a cross-company asset management approach can contribute directly to the bottom line, satisfying the goals of both operations and maintenance managers. Real-time visibility into asset performance lets executives make global decisions based on consistent information. Establishing the right asset management strategy reduces lifecycle costs and increases production uptime, while supporting the ability for the business to take a best-in-class position.

Mary T. Bunzel, is manufacturing industry leader for asset management at IBM ( Contact her at [email protected] and (414) 526-2015.

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