Figure 1: Goals for Chief Financial Officer
With the financial meltdown and the uncertainty surrounding economic recovery, Chief Financial Officers (CFOs) are compelled to make difficult decisions related to internal budgets. Aberdeen surveyed 139 executives in October 2009 to understand their asset management programs, and the results revealed that in more than 70% of the responding companies, the capital and operational budgets have either remained the same or decreased by as much as 20%, as compared to last year. This report will highlight how best-in-class companies are able to manage the reliability of their asset base in this environment by effectively executing an asset performance management (APM) strategy, resulting in higher operational and financial performance.
Compelling facts from the research:
Best-in-class companies realize 2% unscheduled asset downtime as compared to 24% for laggard companies.
Figure 2: Key steps for asset performance management
- Best-in-class companies achieve 89% OEE as compared to 70% OEE for laggards.
- Best-in-class companies are overachieving Return on Assets (RoA) targets by 25% while laggard companies are missing RoA targets by 10%.
- Best-in-class companies are nearly three-times as likely to provide historical and real-time asset performance data to employees for efficient decision making.
- Best-in-class companies twice as likely as laggards to have frequent risk based inspections (RBI) to understand the criticality and the risk profile of their asset base.
The results of the report indicated that CFOs of best-in-class companies are more than 60% as likely as others to have goals around risk management in the next year. This finding is further exemplified by The 2009 Aberdeen report that surveyed more than 4500 companies. One of the important recommendations from the 2009 Aberdeen report for the CFO is to review the effectiveness of current risk management strategies and provide executive level visibility about the organizations risk profile. Establishing a risk based strategy will provide CFOs with a harmonized view of the risk that impacts different parts of their organization and will enable them to create a strategy to proactively address those risks, thus minimizing operational, financials and brand image loss.
Reducing the energy consumption of the asset intensive industries is an untapped resource in both the quest for profits and social responsibility. Best-in-class companies are more likely to automate the collection of energy and emissions data and provide this information to the employees for making effective energy decisions.
While having energy information is critical, the next step is to utilize that information to optimize operational processes. Best-in-class and industry average companies are 85% more likely than laggard organizations to use energy consumption data for operational decision making.
Best-in-class companies are connecting wireless sensors and control system to their EAM solutions, thus enabling real-time visibility into asset condition. In addition, best-in-class companies are further integrating EAM with mobile devices to enable field workers with asset data and also to improve accuracy if data is inputted during operator rounds. Best-in-class companies are also connecting EAM with business solutions such as BI and ERP, thus providing the ability to connect asset performance to corporate performance.
To download the report, click here.