Smaller Vendors Can Still Provide Relevant Business Systems Part Five: Challenges and User Recommendations

Relevant Business Systems, (http://c.technologyevaluation.com/?u=/cp/TEC_article_20050128_al.asp&cl=1&i=732&c=205), a privately-held San Ramon, CA-based provider of enterprise resource planning (ERP) solutions that helps mid-size and large aerospace and defense (A&D), engineer-to-order (ETO), contract manufacturing, maintenance repair and overhaul (MRO), and like project-oriented manufacturing companies to improve their business might be a true example of a focused niche vendor. Relevant, which has a focus in the above closely related markets, has thus recently captured a significant market and mindshare in the segment, particularly given that several US-based ETO-like companies have thereby decided to partner with the vendor by selecting the flagship Relevant ERP (formerly Integrated Financial & Manufacturing Control System [INFIMACS II]) system.

While the company's focus allows it to keep pace with trends in technology and customer requirements in its target niche, too narrow a focus comes with its liabilities as well. Namely, a well-defined and narrow target is indisputably the best course of action for any smaller vendor. Yet, to some, a smaller size compared to most competitors may imply a negative viability perception these days when many believe that "bigger is better". Further, low visibility and brand recognition (which are almost non-existent outside the US), and the product's limited global capabilities are the challenges the company has yet to overcome.

While the nature of the vendor's target market, which often may include US government security clearances and similar classified requirements (i.e., often the prospect requires the potential software provider to be American, whereby any code-supporting staff has to be US citizens), does not require an international focus, Relevant might still be losing some deals in less government-oriented sectors because of its inability to support prospects outside North America and in languages other than English. Thus, it had entertained the thought of starting the presence in Asia (due to Solectron as its high-profile reference), but the reality check has prevailed for the time being. The attempt at global expansion through some potentially synergistic partnerships (see PSI AG To Become More Germane Globally Via Relevant Partnership) has not resulted in much success either.

Yet factoring in costs, the financial viability of the vendor, local support, and many other criteria remain a good practice for manufacturers that are selecting solutions. One should never forget about the competition from large and more visible players like SAP, Oracle (including recently acquired PeopleSoft), SSA Global, Intentia, IFS, Glovia, Deltek Systems, and Cincom Systems that are entrenched within the higher-end of the market and have long begun addressing the required functionality for the target segment. Although the solutions from larger providers often come with some aforementioned caveats for the lower end of the market, such as typically requiring longer implementation time frames, more customizations, or a need to be configured for the business and industry entirely from scratch, the mindshare and brand recognition of larger vendors cannot be discounted.

The situation is not much easier when it comes to its usual direct competitors in the lower end of the market, such as former Lilly Software (now part of Infor Global Solutions), Jobscope, Made2Manage, Epicor (the Vantage product), MAPICS (the SyteLine product), Visibility, and Encompix. Encompix, for instance, also allows users to estimate and quote an overall project using "buckets" of time or dollars, which enables enterprises to perform actual rollups. In other words, companies can track orders and projects and compare their progress to the original estimate, as well as to previous iterative changes, all in the "bucket" form (e.g., total engineering hours or total dollars), which blunts Relevant's differentiation from many other systems that claim to be ETO-oriented but that can only track the current iteration (see Encompix—Thriving on Encompassing Complexity). Relevant may still keep Encompix at bay by targeting somewhat larger ETO companies and emphasizing its multi-division and multicompany capabilities, but the gap is likely to narrow in the future.

Also, many ETO prospects still have notable mixed-mode manufacturing environments, which handle a significant deal of widgets' and require certain repetitive manufacturing and inventory management functionalities, where Relevant may not be that competitive as in clear-cut ETO environments. The vendor has only recently more clearly aligned its sales and marketing efforts fully with the inherent capabilities of its product. Thus, at least some existing discrete mixed-mode manufacturing customers that do not belong to the Relevant's recently sharpened focus on A&D and MRO segments (e.g., at some stage, the vendor was also targeting door and window frames manufacturers, where it has garnered some install base) might feel somewhat neglected by the future product developments, and the vendor will have to walk a fine line between satisfying these customers and not losing its focus and overstretching its R&D funds. This is in spite of co-development relationships Relevant has enjoyed (and continues to enjoy) with a number of customers (two very large ones in particular), which relationships, together with other non-public arrangements, have enabled the vendor to support an aggressive level of R&D that would not normally be possible for a smaller software company.

Relevant might also have a sort of a positioning conundrum of not being big and mighty enough to compete head-on with larger vendors on one hand, but, on the other hand, still being more functionally capable than most of its competitors in the low end of the market. Incidentally, while its decision to embrace J2EE is prudent given a majority of its existing customers are on UNIX and Informix platforms, the riddle for Relevant might be the fact that the vast majority of its new and prospective customers are companies with less than $200 million (USD) in revenues and with a likely preference for Microsoft technologies that might not be too excited about seemingly more complex J2EE environment. At the same time, the need to technologically modernize the product and concurrently provide smooth migrations to existing customers, while investing lots of R&D funds in functional enhancements as to be ahead (or at least abreast) of the pack will also be a challenge. For more information on J2EE vs .NET see Understand J2EE And .NET Environments Before You Choose.


SOURCE:http://www.technologyevaluation.com/research/articles/smaller-vendors-can-still-provide-relevant-business-systems-part-five-challenges-and-user-recommendations-17749/

What Are Manufacturing Execution Systems?

Plant execution software systems have many different scopes, forms, and formats, and they mean different things to different folks. Although plant execution software is used widely in a number of industries, it is rarely described similarly, and its functions are hardly ever identical.

An execution system used at an electronics discrete manufacturing facility is similar only in concept to one used at a food processing plant, and these differ substantially from that used by a pharmaceutical or chemical manufacturer. Time and experience have led the most successful vendors to pursue a “narrow-and-deep” strategy, and to devote their software development to the industries they know best. Even still, the names given to the various components of the execution systems vary greatly among industries and even among companies within an industry—if not between plants within a company.

To add further confusion, official definitions of a manufacturing execution system (MES) differ as well. APICS Dictionary (11th edition) defines it as

[p]rograms and systems that participate in shop floor control, including programmed logic controllers and process control computers for direct and supervisory control of manufacturing equipment; process information systems that gather historical performance information, then generate reports; graphical displays; and alarms that inform operations personnel what is going on in the plant currently and a very short history into the past. Quality control information is also gathered and a laboratory information management system [LIMS—applications used to manage the collection of samples, collection and formatting of test results, and the reporting of results by sample or product category, whereas these applications may be environmental-, medical- or research-focused] may be part of this configuration to tie process conditions to the quality data that are generated. Thereby, cause-and-effect relationships can be determined. The quality data at times affect the control parameters that are used to meet product specifications either dynamically or off line. [italics added]

Gartner’s IT Glossary defines MES as a

computerized system that formalizes production methods and procedures within the manufacturing environment, providing online tools to execute work orders. The term is generally used to encompass any manufacturing system not already classified in the enterprise resource planning (ERP) or open control system [OCS—a manufacturing system that is based on a set of commercially available, standards-based technologies, and that permits the open exchange of process data with plant systems and business systems throughout a manufacturing enterprise, whereas "control" refers to process control for discrete, batch, and continuous-process manufacturing, as well as computer numerical control and other motion controls] categories. In the broadest definition, MESs include computerized maintenance management systems (CMMSs), LIMSs, shop floor controls (SFC—a system of computers and controllers used to schedule, dispatch and track the progress of work orders through manufacturing based on defined routings), statistical process control [SPC] systems, quality control systems, and specialized applications such as batch reporting and control. [italics added]

What these lengthy definitions illustrate is that it can be difficult to easily identify or define the full range of applications used on the plant floor, let alone determine what falls exclusively under MES. Moreover, vendors never hesitate to add to the confusion by using creative labeling to suggest difference.

To put MES into perspective, it can be defined both broadly and specifically. Broadly speaking, MES can be regarded as a collection of business processes that provide event-by-event, real-time execution of planned production requirements. For example, it can calculate what and how much to produce, based on information from the enterprise planning level. From electronic production management systems to shop floor data capture, MES functions manage operations from point of order release to manufacturing, to point of product delivery to finished goods.

A narrow definition of MES is that it serves as a work order–driven, work-in-process (WIP) tracking system that manages and monitors production events and reporting activities. It captures “live” information about setups, run times, throughput, yields, etc., allowing managers to better measure constraints, identify bottlenecks, and get a better understanding of capacity. It closes the loop for production management and helps ensure production is followed as planned.

MES Today

Seen as a bridge from the plant floor to the rest of the enterprise, MES has become the principal means of delivering real-time order status to the supply chain, for available-to-promise (ATP) processing, and for “closing the loop” with sophisticated enterprise and supply chain planning systems.

As a result, and despite the disparities surrounding MES systems, some similarities exist regarding its general functional scope. The functions and information collected in these systems can be categorized similarly. Overall, MESs try to bring pervasive computerization to plant floors in a systematic way by placing diverse functions on a single platform, including quality management, document management, and plant-floor dispatching. The components of these systems can, in principle, be divided into two categories: 1) core functions, which are directly associated with managing the production process and are included in most vendor packages; and 2) support functions, which are somewhat peripheral to the central order management process, and are only provided as options.

An MES tracks WIP through detailed product routing and tracking, labor reporting, resource and rework management, production measurement, and automated data collection (ADC). In other words, it acts as a collection point, clearinghouse, and translator for data that is needed on or is generated by the plant floor (see The Why of Data Collection for more information). It also offers exception management, which provides the ability to respond to unanticipated events that affect the production plan, such as a bill of materials (BOM) item shortage for a work order in process. Most systems include the ability to react to exceptions, following rules that are typically plant-centric, and exception management generally requires some level of configuration or customization in order to meet local requirements.

These core functions are fulfilled through modules like Order Management, which can accumulate and manage work orders that have been received from the planning system, often through some planning system interface that defines what and how information is exchanged. It performs common tasks such as quantity changes to orders; combining or splitting orders; running short-term what-if analyses to determine best current resource use; and prioritizing, dispatching, and scheduling.

A Workstation/Work Centers Management module can implement a work order production plan, and assign workstation scheduling. It is also responsible for the logical configuration of each workstation. The availability of current resources and current scheduling requirements, by operation, are normally maintained here.

Additionally, the Inventory Tracking and Management function develops, stores, and maintains the details of each batch, lot, or unit of inventory of the WIP. The Material Movement Management module schedules and manages the movement of material, either manually or automatically. Through such modules, an MES application can deliver a proven, reasonably justified, closed-loop system for highly complex manufacturing environments that have high product mix; real-time, event-driven conditional workflows; and heavy ADC requirements (such as for lot/serial tracking).

Peripheral MES Functions

What may be a critical flaw of the MES vendor community is its failure to define clearly and consistently the functionality of MES, adding to the confusion of buyers. When a provider declares itself to be an MES vendor, often all it is really saying is that it is not an ERP, enterprise asset management (EAM), or open control software (OCS) vendor, which leaves the user to guess what functionality scope the vendor really provides. MESs come in all shapes and sizes and can have one or more of the components outlined above, depending on the industry and user company.

For instance, a vendor might call a single module—such as a SPC or a physical infrastructure management system (PIMS) package—an MES system. Others may offer a wide assortment of systems and collectively referred to them as an MES, but have no tie between the packages. Also, in some instances, core functions will generally be well integrated, but most of the support functions will not. For example, while more modern applications pay more attention to data integration issues, most current plant-level execution systems still consist of disparate components.


SOURCE:http://www.technologyevaluation.com/research/articles/what-are-manufacturing-execution-systems-19262/

Food and Beverage Industry: Overview of Software Requirements

The basic features and functions common to enterprise resource planning (ERP) and supply chain management (SCM) software will only be briefly discussed herein. It is assumed that the reader already has a good understanding of these capabilities relative to process manufacturing. However, if this is not the case and you want more information in this regard, please see my article entitled, Process Manufacturing Software: A Primer.

This article will concentrate on those features and functions that present considerable challenges to traditional software vendors trying to gain a foothold in the food and beverage industries.

Specifically, this article provides an overview of the requirements for software offerings catering to food and beverage by discussing the following aspects:

* ERP Functions and Features
* SCM Functions and Features
* Additional Considerations

ERP Functions and Features

The software should offer the standard functionality expected from ERP software to support manufacturing and back office activities. The modules to support these activities include financial management, specifically general ledger (GL), accounts payable (AP), accounts receivable (AR), and fixed assets; financial control, specifically budgeting, cash flow, and standard and actual cost accounting; human resource (HR), specifically payroll and time and attendance; production and manufacturing; order taking; and customer service.

However, there may be additional and integrated modules not normally found in ERP packages. These modules may be worth investigating to determine if a vendor can supply this functionality later, when and if needed. This functionality can encompass warehouse management systems (WMS), maintenance management and control (computer maintenance management system [CMMS], enterprise asset management [EAM]), performance management and reporting (enterprise performance management [EPM]), logistic management (third-party logistics [3PL]), financial reporting and consolidations, and material safety data sheet (MSDS) management. Having the flexibility to incorporate this added functionality from a single vendor can eliminate many of the interface issues when similar modules are purchased from third party vendors. Let's look at the maintenance function to illustrate this point.

When you purchase a third-party maintenance management system, you would most likely get only an interface with your inventory and purchasing systems so that you could procure needed but out-of-stock repair parts. With an effective and more encompassing software offering, additional interfaces to payroll (such as using hourly rates to calculate labor costs of repairs); human resource (such as matching an employee's skills with equipment being repaired); warehouse management (such as homogeneously slotting repair parts); and supply chain planning (SCP) (such as providing visibility to planned equipment downtime) now become available. Furthermore, this type of integration can facilitate the cost justification of acquiring and utilizing these optional modules.

As one would expect from software tailored generally to process manufacturing but specifically to food and beverage, an ERP package should ably support the subtleties needed by food and beverage producers. Formulas should be scalable so that production batches can be sized based on the minimum quantity of on-hand ingredients. For example, if you are making a car and you only have two of the required four tires, you cannot make half of a car. Conversely, in the beverage industry, what if you want to make 1,000 gallons of soda but you only have 500 gallons of the required 1,000 gallons of carbonated water? You have the option of making half of the 1,000 gallons of soda. You should expect the software not only provide this type of re-formulization but automatically suggest such alternatives to keep your customers, at least, partially satisfied.

By maintaining the formulas and packaging recipes separately, the software should be able to accommodate "brite" stock and make-to-order (MTO) production runs, typical requirements in the food and beverage industries.

The term, "brite" stock, is common for private label food processors. For example, large grocery chains sell products, such as soups, soda, and meats, under their own brand names, hence private labels. Don't think, however, that these chains have their own manufacturing plants. Chains contract for these products to be produced. In the case of soups, food processors create and warehouse non-descript, non-labeled aluminum cans of soup, hence the term, "brite" stock. Once a confirmed order is received, the private labels are then applied in a separate packaging run. A similar analogy can be made for a MTO scenario. Namely, you wait until the order is confirmed before you complete the manufacturing process.

As you would expect from packages serving the food industry, the software should offer "catch weight" functionality. By definition, catch weight is the recording of the actual weight of a product. For example, whereas a 50-pound case of meat lists for $100, in actuality the case is sold at $2 a pound based on the actual weight of the meat less the packaging material. Accordingly, capturing of this actual weight, which can be used for pricing, is known as the catch weight of the product. The software should take the process one step further by using catch weight to calculate the actual cost of manufacturing the product. Use of catch weight in costing is important because it provides a more accurate picture of the true production costs based on actual yields. The lack of incorporating catch weight in the costing calculation is tantamount to buying shoes without soles. They may look good but their lack of functionally will hurt your performance and ability to walk.

The software should support attribute management on the input side, namely ingredients, and on the output side, namely products. For inputs, attributes should be maintained to define the characteristics of the ingredients used in a specific formula. For example, a critical consideration in making orange juice is the acidity of the oranges. Based on the acidity, other ingredients, such as sugar and water, may be varied to bring the resulting juice output into acceptable ranges. Consequently, knowing the acidity attributes of the oranges will enable you to modify the formula accordingly. Likewise, a customer may require meat products with a certain lean consistency. By maintaining the attributes of various cuts of meat, you will be able to match a product's attributes with requirements of your customers and provide the flexibility of offering appropriate substitutions in out-of-stock situations. Finally, the underlying components within the software should be sufficiently robust to accommodate promotional, volume, and regional pricing practices common to food and beverage. While common in process manufacturing, the food and beverage industries stretch these practices to their collective limits and, therefore, should require special consideration and investigation.

SCM Functions and Features

Typically, ERP software supporting the food and beverage industries records what ingredients were used and what products resulted. Correspondingly, SCM functionality assists you in streamlining your operations to make them more efficient and cost-effective. From a SCM perspective the software should include the traditional modules to facilitate demand forecasting (how much of the product is needed), planning (where to make the product); and scheduling (what processes to use to make the product).

However, because of a tight integration with the other modules, the software should not only provide a view from inside the four walls of the plant but also into some of its nooks and crevices. For example, internal integration with a CMMS would enable the software to have visibility into resources and equipment that are offline or scheduled to be offline, thereby influencing the decision of selecting the most appropriate routing. Similar cases can be made for integration with other internally integrated processes such as warehouse management and attribute management.

The software should also enable integration with sub-modules, which would provide additional flexibility and efficiencies. These sub-modules include lot and sub-lot allocations, inbound logistics, cross-docking, and shelf life planning. By knowing what is inbound, the planning process gains increased visibility. As a result, the software should be able to take the advantage and be able to utilize "soon to be available" ingredients. This type of information can be incorporated in the planning and scheduling calculations.

Tanks are common storage containers for works in process in the food and beverage industries. However, tanks provide unique challenges. Typically, tanks require special handling such as pressurization and temperature controls. As such, SCM software should be able to account for the availability of tanks, tank volumes, special settings and controls, and the current status of each tank. You should expect the software to deal with and respond to the following type of tank-related questions:

*

Can the software handle product stored in tanks and, if so, can it maintain resource data needed for scheduling such as capacities, cleaning requirements, and changeover requirements?
*

Can the software handle the simultaneous or continuous flow of product in and out of the tanks?
*

Can the software record and utilize the minimum and maximum batch quantities for each tank? Minimum and maximum levels for each tank?
*

Can the software accommodate shelf life of the intermediate products stored in tanks? Maximum standing time per product in tanks?

One of the worst fears for a food processor and distributor is a call at 4:00 PM on a Friday, just before your staff is getting to leave for the weekend, from a restaurant whose customer said, "You know, this food tastes funny." The shock waves of recall reverberate throughout the organization. Anticipatory paralysis begins to set in. By meeting the requirements for such organizations as the European Union (EU), the Food and Drug Administration (FDA), and the International Organization of Standardization (ISO), the software's trace engine should provide accurate and current recall information for your customers, suppliers, and consumers. Thus, it can speed up and simplify the recall process. This, in turn, can reduce the effect, impact, and cost of such events, not to mention minimizing adverse media coverage. The functionality might particularly be appreciated nowadays with recent outbreaks of "mad cow" disease and other consumer concerns.

The software should offer yield optimization processes. These planning components are decision support tools focusing on calculating the most profitable way to process raw materials and ingredients to meet demand. The inputs for yield optimization include supply quantities and prices, demand quantities and sales prices, production costs and capacities, and inventory costs and capacities. The output is an optimized day-by-day production schedule of what to produce and how to produce it. The inventory levels at the end of each day and any requirements to move raw materials or semi-finished products between sites, locations, and/or tanks are also calculated. The latter benefit is achieved through the tight integration and complete visibility within the four walls of the production facility and warehouse.


SOURCE:http://www.technologyevaluation.com/research/articles/food-and-beverage-industry-overview-of-software-requirements-19952/

Federal Contract Management and Vendors' Readiness Part Three: Meeting Federal Requirements

Meeting Federal Requirements

Companies that are not already offering the capabilities described in Part Two will likely not be able to tap the recent surge in the federal and defense markets. Conversely, those vendors and their users—government contractors—who can deliver comprehensive solutions that satisfy the exacting, stringent requirements of federal agencies are in the driver's seat to capture that market segment. Many customers require weekly progress reports and may be comfortable with the Microsoft Project format, but the product on its own cannot give the visibility and scheduling over a great number of concurrent projects, and that is where the products from niche vendors come into the picture within the mid-market manufacturing segment and even for smaller defense contractors.

Increased federal adoption of ERP systems may imply that these have been increasingly offering a government endemic functionality. As an example, leading ERP vendors provide procurement software that works with pertinent laws and regulations, such as the Code of Federal Regulations (CFR), DoD Contracting Regulations, General Services Administration (GSA), Federal Acquisition Regulations (FAR), Federal Supply Schedules (FSS), etc. Also, they provide human resource (HR) systems that align with military or general schedule pay rates, and financial systems that comply with Joint Financial Management Improvement Program (JFMIP) practices for government financial systems. Further, the Tax and Revenue Management module within some ERP suites provides federal, state, and local government agencies tools to automate the tax collection process by enabling constituents to conduct and view financial transactions.

In addition to the above-depicted government-oriented manufacturing and accounting capabilities (i.e., work breakdown structure (WBS) with native earned value measurement (EVM), some companies require an ability to track every product, each of its subassemblies or parts, and its stage in the production cycle, as a prerequisite to production efficiency and profitability, which is especially true for contracting MRO organizations. Additionally, the ability to store and access quality tests history data on an ongoing basis and the ability to thoroughly analyze that data are crucial in keeping costs low and quality high.

Service Parts Management

The need for better service parts management is finally gaining top-level management attention in many A&D companies since excessive carrying costs and obsolescence losses are being recognized as an unexploited opportunity for savings and a better bottom-line performance.

The situation becomes even more complicated with rotable parts, such as interchangeable elements of an aircraft that are removed, rebuilt, or reinstalled, almost as a rule always on a different aircraft. In this industry where every nut and bolt is important for safe operation, it takes an immense attention and effort to track interchangeable components and subassemblies for costing, replacement scheduling, and time-to-failure prediction. A&D companies design low-volume, high-cost products for high reliability, but still maintain stocks of complex and expensive spares, since in this industry, the impact of any failure is large and requires adequate stocks of parts at several locations for rapid replacement in case of repair. On one hand, minimizing the number of new parts introduced into the market (and subsequently into inventory) should be a major aim, particularly as parts face obsolescence from new product introductions, but, on the other hand, rotable parts and harvesting repaired components only add to the complexity and efficiency of this process.

Lot and serial tracking capabilities, the so-called tail effectivity, permits users to tie every part (within part lists and diagrams) on a plane back to that one entity. Serial number (tail) effectivity for the aircraft and aerospace industry is enabled since within the astute ERP system, a table should carry information on each serial or tail number for each item used, including the original date the serial or tail number was added, received, or stocked, as well as item information, such as the original vendor lot number, inventory quantities, weighted average costs, and the last inventory adjustment date.

The MRO companies also have very stringent requirements they must meet regarding tracking parts and condition codes. This functionality allows for demand by item condition to be matched against inventory by item condition, and it also allows for inventory management and MRP-based supply planning by condition code. While these functionalities may sound ordinary and appear to be offered by many vendors as supported' when responding to requests for information (RFI), subsequent product demonstration often reveals the need for some tweaking or even for a major modification in order to satisfy stringent customer requirements. The devil is always in details.

For a detailed discussion see MRO and Spare Parts Management Considerations.

Challenges

Incidentally, while the decision of some and not necessarily all large vendors to embrace the Java 2 Enterprise Edition (J2EE) development environment is prudent given a majority of their existing customers on UNIX and Oracle platforms, the conundrum for these vendors might be the fact that the vast majority of their new and prospective customers are the companies that have less than $200 million (USD) in revenues and with a likely preference for Microsoft-centric technologies and who might not be too excited about a seemingly more complex J2EE environment. At the same time, the need to technologically modernize the product and concurrently provide smooth migrations to existing customers, while investing lots of research and development (R&D) funds in functional enhancements as to be ahead (or at least abreast) of the pack will be a significant challenge for a smaller vendor.

Further, the broader enterprise asset management (EAM) and computerized maintenance management systems (CMMS) applications continue to grab headlines as a realistic way to reduce expenses and increase revenues. For one, maintaining an adequate level of repair or service parts inventory based on forecasted equipment usage can prevent already limited funds from being over-allocated, just to achieve a false sense of security. Also, an effective preventive maintenance program can improve equipment utilization and availability, enabling production schedules to be achieved, especially when an exorbitantly expensive equipment replacement is not an option during depressed economic times.

Therefore, A&D companies require an ever broader suite of functionality ranging from a strong engineering foundation and customer service front-end to support demand management, all bundled with a set of administrative and reporting capabilities and integration to financial and human resource (HR) management software, as to share information that drives operational efficiency, such as inventory control and labor control. Bad news for some relatively smaller incumbent ERP vendors like Deltek Systems, Relevant Business Systems, Cincom Systems or Encompix could be the fact that some of their direct and likely competitors like Oracle, IFS, Intentia, SAP, Glovia, and Ramco Systems offer more integrated capabilities like automated maintenance scheduling, tracking, and management; remote diagnostics; reliability centered maintenance (RCM); fleet or facility management and planning; centralized access to engineering data; parts planning, sourcing, valuation, and category spend management; asset performance reporting, and so on. For more information, see EAM Versus CMMS: What's Right for Your Company?


SOURCE:http://www.technologyevaluation.com/research/articles/federal-contract-management-and-vendors-readiness-part-three-meeting-federal-requirements-17725/

Supply Chain Management: Morphing the Functional Scope of Service Parts

The Morphing Functional Scope of Service Parts SCM

There are many requirements involved in the supply chain management (SCM) of service and replacement parts that make the process different from traditional, "new parts" SCM (see Part One). As a result, some specialist SCM solutions have been developed to address these challenges. Some might resemble conventional SCM solutions, but feature different approaches. The requirements of service and replacement parts SCM solutions also vary given the wide range of members that exist across multi-node supply chains. Each of these members can be grouped into a few major solution functional categories.

Part Two of the Lucrative but Risky "Aftermarket" Business: Service and Replacement Parts SCM series.

Service and replacement parts resource management, which is the main focus of this article, consists of a variety of solutions that are comparable to supply chain planning (SCP) components in conventional SCM suites. Service and replacement parts management has inventory optimization at its core that determines the best way to stock inventory across the supply chain to maximize service levels while minimizing investment. In other words, the basic goal is to maintain the optimal placement of resources, including parts, tools, and service technicians, across service regions to meet service level agreement (SLA) commitments at the lowest possible cost.

These spare parts planning systems provide the means to define and implement a spare parts inventory strategy that meets enterprise objectives. In other words, they tend to help enterprises understand the relationship between a customer service target level and the value of the inventory required to support it. To that end, they combine forecasting with replenishment logic to determine the optimal level and mix of parts to carry at each stocking tier, given certain capital investment targets and customer service level goals. Unlike finished goods, where nearly 100 percent customer service levels are desirable, here only certain classes of spare parts need to be available all the time, at all supply chain nodes.

Spare parts planning systems might also improve user productivity, since by automating the basic forecasting and replenishment process, planners and inventory managers can focus on exceptions and more-strategic planning activities, such as how to handle expensive, slow-moving items or how to use substitute parts to reduce costs or obsolescence.

Achieving this goal requires a mix of tools. These range from strategic tools identifying demand profiles, service objectives, and the best way to position resources to meet demand, to tactical tools determining what orders need to be placed to meet strategic objectives. Such goals include managing the risk inherent in allocations and transships; repair or new purchase orders; new product introductions (NPI) or discontinuations; and the replenishment and redeployment decisions.

Tactical refinements of inventory optimization entail setting minimum and maximum inventory levels, which recognizing stochastic, changing demand and lead-time. The algorithms required to provide this support are significantly different from those found in conventional, new parts production SCM, and justify the use of focused, point solutions, including dynamic programming, simulation, mixed integer optimization, etc. In the case of inventory optimization, two parts may be present:

1. Multi-echelon optimization determines optimal stocking levels of an item at a particular location, based on the item's possible investment levels. In this case, an echelon is the level of supply chain nodes, or disintermediation. For example, a supply chain with two independent factory warehouses and nine wholesale warehouses delivering product to 350 retail stores is a supply chain with three echelons between the factory and the end customer. One echelon consists of the two independent factory warehouses, the other echelon consists of the nine wholesale warehouses, and the third echelon consists of the 350 retail stores. Each echelon adds operating expenses, holds inventory, adds to the cycle time, and expects to make a profit.
2. Multi-item optimization determines the optimal allocation of inventory investment across items in a product group.

Even fundamental concepts like customer service level are different in the service and replacement parts milieu. Namely, in new parts production, the customer service level (synonymous with customer service ratio, fill rate, order-fill ratio, and percent of fill) is a measure of the delivery performance of finished goods, usually expressed as a percentage. In a make-to-stock (MTS) company, this percentage usually represents the number of items or dollars (on one or more customer orders) that were shipped on schedule for a specific time period, compared with the total that were supposed to be shipped in that time period. Likewise, in a make-to-order (MTO) company, the customer service level is usually a comparison between the number of jobs or dollars shipped in a given time period and the number of jobs or dollars that were supposed to be shipped in the same period. Yet, in the service and replacement parts world, with a high level of unpredictability, how can one forecast the dollar amount of service or repair parts that were supposed to be shipped during a particular period?

Thus, given the random nature of service and breakdown events, it is clear that demand uncertainty (which can be measured by the standard deviation, mean absolute deviation [MAD], or variance of forecast errors) cannot be eliminated through traditional forecasting methods. Hence, trade-offs must be evaluated on the basis of captured future risk assessments; estimates of demand probability distribution, relevant to specific customer products; and locations at future points in time. The decisions made across the planning horizon thus constitutes an exercise in risk management


SOURCE:http://www.technologyevaluation.com/research/articles/supply-chain-management-morphing-the-functional-scope-of-service-parts-18086/

"Once Bitten” Vendor Is Not “Twice Shy” about New Acquisition

Much has been said lately by Technology Evaluation Centers (TEC) and other market observers about the ongoing turnaround success of IFS (OMX STO: IFS), the global enterprise applications company. Founded in 1983 in Sweden, the company can now boast approximately $300 million (USD) in revenues and 2,650 employees worldwide.

The vendor pioneered component-based enterprise resource planning (ERP) software with IFS Applications—now in its seventh generation—whose component architecture provides solutions that are easier than most to implement, run, and upgrade. IFS Applications is available in 54 countries and 22 languages, and the vendor has over 600,000 users across seven key vertical sectors: manufacturing; automotive; process industries; utilities and telecommunications; construction, contracting, and service management; aerospace and defense (A&D); and retail and wholesale. For information on IFS’s more recent state of affairs, see Two Stalwart Vendors Discuss Mid-market Issues

One of many reasons for the vendor’s stumbling and poor financial performance of yesteryear was its ill-advised acquisitions of several enterprise software companies in the late 1990s. Namely, IFS expanded into the customer relationship management (CRM) arena by acquiring former Israel-based CRM vendor Exactium for its product configuration module. The subsequent sell-off move to Pivotal (now part of CDC Software) in 2000 (see What Is IFS Up To in the CRM Arena?! ) represented IFS’s tacit concession that it had gone beyond its means with its too-ambitious product scope and geographic expansion.

IFS aimed at further expansion in the 1990s: hoping to gain a fast US beachhead by converting its customer base from the Time-Critical Manufacturing (TCM) product to its own enterprise applications, IFS bought US-based ERP vendor Effective Management Systems (EMS). However, customer satisfaction with TCM was (unexpectedly to IFS) high and, therefore, customer loyalty made it difficult to move customers away from TCM. With the majority of TCM customers reluctant to make the transition, and with IFS reluctant to maintain two separate ERP product lines, IFS then agreed to spin off the TCM product line in November 2001. Thus, the current WorkWise organization was created of former EMS staff, and has since focused solely on the TCM product line and its customer base (for more information, see A User-centric WorkWise Customer Conference).

Yet the sell-off at the end of 2004 of IFS’s Brazilian subsidiary; of tangential computer-aided design (CAD) applications for process, electrical, piping, and instrumentation design; and of applications for payroll (see IFS Continues Its Reinvention through Pruning) was a harbinger of today’s stabilized—even “upbeat”—company. After careful soul searching, IFS's then-management decided to stay focused on core competencies instead of extending painstaking efforts to develop peripheral applications for a small fraction of customers in Scandinavia, where the payback would have been highly unlikely.

Although creating a differentiating trait might have been tempting (no other ERP vendor has ever had native CAD applications for piping design), IFS’s CAD customer base was too small for the vendor to justify developing its own CAD applications in the long term, and the company did not have enough specialists outside the Nordic region to sell and support CAD applications globally. Again, this was possibly the best proof that IFS was getting rid of its erstwhile “not invented here” attitude.

Back to the Future?

Consequently, some might not have expected the vendor to consider acquisitions for some time to come. And yet, in July 2007, IFS’s joint venture with BAE Systems, IFS Defence Ltd., bought Information Science Consultants Ltd. (iSC). A privately held company based in Cirencester, UK, iSC specializes in naval maintenance management applications and services; the UK Royal Navy fleet uses iSC’s onboard and onshore unit maintenance management system (UMMS). The company also provides leading expertise in reliability-centered maintenance (RCM) processes and tool sets to a wide range of defense and commercial organizations. At the end of 2006, iSC (in British pounds) generated revenue of £2.4 million, with earnings before interest and tax (EBIT) of £0.5 million on gross assets of £1.8 million. Following the acquisition, iSC will operate as a business unit of IFS Defence.

Market Impact

Before jumping to a “not again!” conclusion, perhaps one should note that this acquisition might be of a somewhat different nature than IFS’s previous unsuccessful ones. Acquisitions of niche specialist companies, done to fill some functional gaps or to assert leadership in a certain vertical or geographic segment, usually make sense or justify themselves quickly. To that end, having originated from the realm of computer maintenance management systems (CMMS) for utilities in the 1980s, IFS has since become one of the leading suppliers of enterprise asset management (EAM) solutions, with a leading market share in the Europe, Middle East and Africa (EMEA) region.

In a nutshell, with iSC, IFS hopes to bolster its reliability-centered maintenance (RCM) capabilities in addition to its already strong EAM; maintenance, repair, and overhaul (MRO); and project-centric manufacturing solutions for the A&D sector. IFS’s A&D customers include the British, the Norwegian, and the US defense organizations, whereas its commercial MRO shops and operators include Finnair, Bristow Helicopters, Aero-Dienst, Hawker Pacific, and Jet Turbine Services, to name a few. IFS also provides solutions to original equipment manufacturers (OEMs), such as General Dynamics, Lockheed Martin, Eurofighter, BAE Systems, Saab, and General Electric (GE) Transportation.

Further along the lines of a different acquisition tack, strong joint ventures that go well beyond the usual press release (PR) announcements and joint marketing and financial arrangements (such as those with BAE and NEC), have recently become the norm for IFS. However, acquisitions are usually done directly by IFS, whereas the iSC acquisition is unusual for its being conducted by the IFS Defence joint venture. This route was apparently chosen owing to IFS Defence’s specialization in the A&D sector.

Historically, iSC has been mainly involved in consulting (the company is a custom software developer and consulting firm, and it supports customers' implementations of its software solutions), whereas IFS has primarily been a software product provider. Though conducting the acquisition via IFS Defence mitigates the financial risk for IFS and provides a better, consulting-oriented, cultural fit, some concerns might involve the ownership of the product and whether it will be rolled out globally to IFS’s customers beyond the defense sector.

New Asset Maintenance Appeal?

EAM and MRO seem to be of increasing interest to customers, and consequently to vendors, as can be seen by many vendors’ and venture capitalists’ (VCs’) deliberate investments in these areas. For instance, IBM recently invested a good chunk of change to acquire the former MRO software, despite the giant’s reluctance to be an enterprise application provider per se (in that it has long preferred and continues to partner for applications, providing mainly the underlying platform and infrastructure).

Also recently, Vista Equity Partners combined its individual EAM and field service investments, the formerly public Indus International, with the former Mobile Data Solutions Incorporated (MDSI) to create the new company Ventyx. The investment of Francisco Partners in the formerly public Mincom; Infor’s acquisition of the formerly public Datastream (see The Impact of the “Assembler Strategy” in the Enterprise Applications Field); Consona’s acquisition of Relevant Business Systems (see Smaller Vendors Can Still Provide Relevant Business Systems; Part Four: MRO and Spare Parts Management); and Lawson Software’s merger with Intentia (a former Swedish competitor of IFS with strong EAM and MRO offerings; see EAM versus CMMS: What's Right for Your Company?) should all speak volumes about the maintenance market’s attractiveness.

The enterprise applications leaders SAP and Oracle have also been extending their own EAM offerings. While Oracle has such capabilities in both its original Oracle E-Business Suite (EBS) and JD Edwards lines, SAP recently (at its EAM-centric user event) explained how SAP Enterprise Services Architecture (SAP ESA) should enable it to weave together native product enhancements and third-party partner solutions to satisfy two critical user needs: 1) innovation through composite applications to enable revenue growth, and 2) productivity and efficiency improvement through platform consolidation and standardization to drive bottom-line (profit) growth. User enterprises seem to have been interested lately in certain areas of asset management, including EAM process efficiency improvement; maintenance effectiveness and reliability; EAM applications usability and information access; and improvement in return on investment (ROI) from EAM projects.

In fact, Lawson Software recently conducted an internal global online study on nearly 200 companies (representing the utilities, manufacturing, mining, process manufacturing, and transportation sectors). The study concluded that concerns about plant safety, demand for asset availability, and environmental awareness or corporate social responsibility (CSR) and legislation (see "Evergreen”—Environmental Regulations for High-tech and Electronics, Chemical, and Oil and Gas Industries) are encouraging manufacturers to move to preventive and predictive maintenance strategies.

In other words, in the past, plant uptime and safety have primarily been internal plant issues (concerns about keeping the plant running and operators safe). But now, however, because of the CSR and environmental issues (for example, improving energy management and emission-reduction monitoring), such issues are more a strategic and external business matter. That is, an integrated EAM solution should ensure that a company’s assets operate efficiently within environmental guidelines.

For instance, a preventive maintenance program can help to lengthen the life span of spare parts and assets, save natural resources, and reduce waste. Some really advanced EAM adopters are now even viewing maintenance as a profit opportunity, and not just as a cost burden (or a necessary evil). Indeed, these users have begun to understand that RCM methods might increase the reliability and availability of a plant, which in turn might lead to more throughput (see Reliability-driven Maintenance—Closing the CMMS “Value Gap”?). Additionally, preventive maintenance and condition-monitoring techniques also extend the lives of the assets, thereby saving on capital expenditure.

Also, EAM extended beyond individual maintenance work orders improves spare part inventory management and procurement, enabling the purchasing department to negotiate better volume discounts, component call-offs, and consignments, among other advantages. And, there are benefits on the planning side that mean manufacturers are less likely to need “emergency” (rush) orders and the costs that come with expediting, which are typically associated with traditional “break-fix” tactical and reactive maintenance approaches.

SOURCE:http://www.technologyevaluation.com/research/articles/once-bitten-vendor-is-not-twice-shy-about-new-acquisition-19291/

MRO and Spare Parts Management Considerations

Service or spare parts have lately become both a blessing and a curse for many like manufacturers of complex finished products. On one hand, contract manufacturing, maintenance repair and overhaul (MRO) or depot repair activities, and aftermarket service parts use or sales can generate additional revenue streams (even at a multiple level of original product sales) with high margins, and contribute significantly to corporate profits and thus offset typically lackluster growth in other mainstream operations. Yet, on the other hand, these companies must maintain large inventories of highly expensive, often slow-moving parts but susceptible to obsolescence, to satisfy customer demands for immediate delivery and action.

The need for better service parts management is finally gaining top-level management attention in many aerospace and defense (A&D) companies, and in similar complex manufacturing or asset intensive industries, since excessive inventory carrying costs and obsolescence losses are being recognized as an unexploited opportunity for savings and a better bottom line performance.

The situation becomes even more complicated with rotable parts, such as interchangeable elements of an aircraft that are removed, rebuilt or reinstalled, almost as a rule always on a different aircraft. In this industry where every nut and bolt is important for safe operation, it takes an immense attention and effort to track interchangeable components and subassemblies for costing, replacement scheduling, and mean time-for-failure (MTFF) prediction. A&D companies design low-volume, high-cost products for high reliability, but still maintain stocks of complex and expensive spares, since in this industry, the impact of any failure is large and requires adequate stocks of parts at several locations for rapid replacement in case of repair. On one hand, minimizing the number of new parts introduced into the market—and subsequently into inventory—should be a major aim, particularly as parts face obsolescence from new finished product introductions, but, on the other hand, rotable parts and reusing ("harvesting") repaired components only add to the complexity and likely impaired efficiency of this process.

Lot and serial tracking capabilities, the so-called tail effectivity, permits users to tie every part (within part lists and diagrams) on a plane back to that one entity. Serial number (tail) effectivity for the aircraft and aerospace industry is enabled since within the appropriate enterprise resource planning (ERP) and back-office system, a table should carry information on each serial or tail number for each item used, including the original date the serial or tail number was added, received, or stocked, as well as item information, such as the original vendor lot number, inventory quantities, weighted average costs, and the last inventory adjustment date.

The MRO companies also have very stringent requirements they must meet regarding tracking parts and condition codes. This functionality allows for demand by item condition to be matched against inventory by item condition, and it also allows for inventory management and material requirements planning (MRP)-based supply planning by condition code. While these functionalities may sound ordinary and appear to be offered by many vendors as supported' when responding to requests for information (RFI), subsequent product demonstration often reveals the need for some tweaking or even for a major modification in order to satisfy stringent customer requirements. The devil is always in details.

As an example, the native ability to run MRP by condition code is not a feature typically found amongst a majority of mainstream ERP systems. To enable an ERP system to track the condition of a component (e.g., new, overhauled, once used, refurbished, or a combination of these) and to restrict mixing inventories of materials with different condition codes, would require a colossal modification. When a system does not have this condition code capability, the MRO operation will then need to use multiple item numbers. This work-around causes confusion and significant problems in terms of planning, work order supply or demand management, and it creates a big opportunity for bloated inventory and for mistakenly using the wrong item condition in a customer's repair if work order substitutions are not always carried out precisely. It can virtually invalidate the initial reason the company purchased the ERP system in the first place.

MRO Operational Flow

Also, the operational flow of an MRO business is very different from the typical manufacturing company, and this capability for both planning and costing is critical to properly manage and represent costs, determine pricing and portray margins in an MRO company. Without the condition code capability by item it is extremely cumbersome to maintain multiple item costs for the same item or to plan it appropriately. Conversely, with this capability there is no need for workarounds in regards to item planning or costing. Namely, when a single item with multiple conditions such as "new", "used", or "overhauled" exists within the system, it allows each item or condition to be uniquely planned and inventoried, as well as carry its own cost.

Another requirement is the ability to advise users if any given part revision can be mixed in inventory with other revisions or shipped for a particular order. Each Revision Level may indicate, for example. on a scale from 1 to 99, a specific item's fitness for inventory mixing or shipment. During an issue or shipment, the astute ERP system should review whether or not the fitness number associated with the location allows specific items to be placed into inventory or shipped. As products are revised over their life cycles, certain combinations of features will not coexist properly. Using the Revision Level feature, users are assured that the system is determining if the lot or serial number can be mixed or shipped with existing quantities. They can also stop a given item or revision from being used, preventing its receipt in store locations and issues from all locations throughout the company.

Other nifty MRO-oriented feature would be component tracking by illustrated parts list (IPL) for aircraft and related maintenance organizations, whereby the solution quickly pulls together the unique bill of material (BOM), (i.e., IPL), needed for any particular job, even though on-condition repairs cannot be determined until after a technician review specifies the required labor and material, whereas users can maintain information generated about the returned item from the initial receipt of the part through quoting, repair, shipping, and invoicing. Further, the returned items information from receipt to invoicing for MRO organizations enables users to track work orders, purchase orders, sales orders, inventory, approvals such as Federal Aviation Agency (FAA) airworthiness Form 8130, and costs by both project item and condition code, whereby the module maintains a capabilities file by item number that automatically determines if the user is allowed to perform the work which needs to be done, assuring the shop only undertakes repairs on items for which it is certified.

Last but not least would be a variance of IPL, called illustrated parts breakdown (IPB) system, which is essentially a computerized, interactive tool used to develop an "owner's manual" to assist in the MRO of large end items such as aircraft. The system maintains all data required for the composition and production of IPB manuals and has the capability to be linked to "illustrative data" or drawings and documents, all of which can be updated in real time. The IPB "manuals" include front matter (i.e., table of contents, list of illustrations, list of applicable service bulletins, etc.), maintenance parts lists (MPL) containing illustrations, part numbers, descriptions, quantities, notes, codes, and a part number and reference designation index.

The IPB "illustrated parts list" assists maintenance and supply personnel in requisitioning, storing, issuing, and identifying parts, which are listed in "disassembly" sequence, such that the mechanic working on an installation or assembly should remove the lowest-level part first. Some IPB modules were designed to meet the distinct format and style specifications of military aircraft, yet they can also be easily modified to produce manuals in the Air Transport Association (ATA) 200 format of commercial aircraft. They should also be capable of storing and maintaining multiple publications for various aircraft models and IPB component manuals at one time.

SOURCE;http://www.technologyevaluation.com/research/articles/mro-and-spare-parts-management-considerations-17719/

Maintenance Scheduling 101

I've read and seen a lot of material about advanced maintenance scheduling techniques, but the reality is that most maintenance people are still struggling with the basics.

As a former operations/maintenance coordinator who was sick and tired of operating in a reactive, firefighting mode, I understood the potential benefits of proper maintenance scheduling—the challenge was getting everyone on the same page. Industry experts suggest that in order to move from reactive to proactive maintenance, at least 80 percent of the work should be planned on a weekly basis and compliance to this schedule should be at least 90 percent.

For many, attaining this level of scheduling and execution of planned maintenance work is an imposing challenge. I, too, was a skeptic. I had seen my maintenance organization fall into a quagmire of never-ending emergency work and we were constantly struggling to keep our heads above water. Scheduling planned work seemed like a distant planet. But this was about to change.

A new maintenance manager was hired and his first decree was that planned preventive maintenance (PM) work was going to be the order of the day. When creating weekly schedules we had to schedule all due PMs first and then distribute the remaining labor hours according to priority. Having grown accustom to the daily regime of firefighting maintenance, I saw this as nothing more than a short-lived "make-work project"; however, the new manager had other plans.

His first order of business was to sit with Operations and explain what he was trying to do and the potential benefits the Operations group could achieve. His plan was to involve the Operations group in performing routine repetitive PMs as part of their normal rounds. While doing area walk-downs, Operators could check lubrication globes to ensure oil was present and replace it if it was down. They could also perform visual inspections as well as touch and feel components for heat and vibration, and check for abnormal noise, smell, and any process leakage. As a result, Operations started playing a more active role in ensuring the proper performance of their equipment. They would inspect safety guards around couplings and shafts and would report any abnormalities to the shift mechanic or to the shift electrician who would then determine the severity of the situation. They would also set up air blowers to help cool down a hot piece of equipment if the shift mechanic was busy on another job. They would even change filters on air supply coolers for key motors. A new policy also came into place: anyone could enter a request for work. No longer was this the realm of maintenance or production supervisors; anyone could initiate the procedure.

Using a team approach, monthly meetings were held involving representatives from Operations, the operations superintendent, an operations/maintenance coordinator, planner, maintenance supervisor, maintenance area technician, E&I supervisor, E&I area technician, area engineer, process control technician, and quality control technician. At these meetings, a process was established for reviewing the PM program. PM jobs were reviewed for suitability to the current operating conditions that existed in the plant. Many of these PMs were what the original manufacturers recommended and the frequencies were reviewed to determine if they were still relevant. Could a weekly, or monthly PM become a three-month PM or a yearly PM? Could weekly visual inspections of non-production related equipment such as HVAC be handled by Operations? Maintenance would still be required to attend to major PMs such as semi-annual inspections and when Operations detected a discrepancy from the expected norm, Maintenance would handle the subsequent work order.

As a result, maintenance slowly but steadily moved from a reactive to a proactive mode and maintenance efficiency was drastically improved. Equipment availability and reliability increased and downtime and all its inherent costs decreased. Schedule compliance was consistently around 90 percent, and when it wasn't, the reason could be easily identified and documented.

The Key Ingredients

Communication is key to successful maintenance scheduling—this involves everyone from the planner, scheduler, maintenance supervisor, craftsman, storeroom personnel, operations superintendent, to the operator who is responsible for securing and having the equipment ready for maintenance. Any breakdown in this communication diminishes the probability of success.

The role of each stakeholder needs to be clearly identified—what's expected and what the stakeholder brings to the table. Below is a comprehensive list of stakeholders, and the roles they typically play.

Planner ensures the work is properly planned with trade requirements, stores material, and directs purchase material and specialty service(s) identified on the work order. Any safety concerns or requirements are documented, as is the description of the work to be carried out.

Scheduler ensures that the trades are available to conduct scheduled work. The maintenance supervisor attends to the specifics as to who-what-where-when. The scheduler also ensures that the material and services are available and communicates this information to all concerned parties in Maintenance and Operations etc.

Maintenance Supervisor looks after the day-to-day activities comprised in the weekly schedule and assigns technicians, in a best-fit fashion, to the various work orders. The maintenance supervisor also determines the trade availability for the week using a simple excel spreadsheet and forwards it to the scheduler. (An example of such a spreadsheet, can be downloaded from http://c.technologyevaluation.com/?u=/cp/TEC_article_20050129_al.asp&cl=1&i=736&c=205&l=1)

Craftsman carries out the assigned work and communicates the results, as well as any discrepancies in planning or scheduling of the work, back to Maintenance for further analysis.

Storeroom Personnel notify Maintenance of the receipt of goods and any deviation from the expected standards, such as damaged packaging. This affords Maintenance an opportunity to job stage and inspect the material prior to executing the work order and then finding out it is damaged.

Operations Superintendent must be informed well in advance so that the equipment can be released to Maintenance. This individual is aware of production schedules and can determine with Maintenance the opportune time to release the equipment.

Operator is responsible for securing equipment by performing the proper lockout and any block and bleed requirements. This includes any vessel entry preparations such as purging and gas detection.

After the stakeholders have been identified, good scheduling practices should be communicated to them. In his book, the Maintenance Planning and Scheduling Handbook, Doc Palmer, a professional certified engineer and a noted authority in the area of maintenance scheduling, details how to be proactive through good scheduling practices. The following is a quick overview of these key elements:

* Create job plans that providing the number of persons required, lowest required craft skill level, craft work hours per skill, and job duration information, which are necessary for advanced scheduling.

* Adhere to weekly and daily schedules as closely as possible.

* Develop a one-week schedule. Created by the scheduler, this schedule should be made for each crew, based on craft hours available, forecast that shows highest skill available, job priorities, and information from the job plans. It should assign work for every available work hour and allow for emergencies, high priorities, and reactive jobs by scheduling a significant amount of work on easily interrupted tasks.

* Develop a daily schedule one day in advance and should be created by the crew supervisor using current job progress. It should use the one-week schedule and new high priority, reactive jobs as a guide. The crew supervisor matches personnel skills and tasks.

From the Maintenance Planning and Scheduling Handbook by Doc Palmer. McGraw-Hill: New York: 1999.

After roles have been defined, short daily scheduling meetings must be held to update and communicate deviations from the schedule. Planning and scheduling are crucial to maintenance management. Being proactive as opposed to reactive cannot be stressed enough.

SOURCE:http://www.technologyevaluation.com/research/articles/maintenance-scheduling-101-17755/

The Impact of the 'Assembler Strategy' in the Enterprise Applications Field

In evaluating recent acquisitions in the enterprise resource planning (ERP) field, it will be useful to describe Infor Process Group's vertically-focused "assembler strategy" (also see Stability and Functionality for Process and Discrete Manufacturers). It is interesting to note that the Infor of today originated with the Infor Process Group; its very first acquisition was the 2002 Process Group spin-off from the former SCT Corporation, which brought Adage ERP and Fygir SCP process manufacturing products into the fold (see iProcess.sct Enters Golden Gate Opportunity). It is ironic, however, that this very functional and prosperous "mother" product portfolio has been left largely unattended by Infor for some time, owing to a spate of other acquisitions, especially within the now much larger discrete manufacturing and wholesale distribution groups.

This is Part Four of the six-part series The Enterprise Applications "Arms Race" To Be Number Three.

But any "injustice" in this regard has seemingly been rectified. For one thing, in late 2004, Infor acquired IncoDev Software-Entwicklung GmbH, headquartered in Hamburg (Germany). Over the past twenty-five years, this company has provided ERP software to large and midsized European companies within the chemical, dyes and paints, life sciences, and food and beverage industries. Their software has deep a vertical focus, supporting most requirements of the lot- and recipe-oriented manufacturing industry, which, combined with its broad customer and partner base throughout Europe, was an important factor in strengthening Infor's position within process industries.

The combination of IncoDev's ERP capabilities with Infor's existing supply chain planning (SCP) offerings, international presence, and financial strength, provided additional benefits to its customers while increasing the vendor's competitive advantage. IncoDev's ERP solution, rebranded into Infor Blending, now supports many aspects of financial management, production planning, and inventory management for specific process industries, and is certified for the pharmaceutical industry. The solution also includes integrated quality management, a laboratory information management system (LIMS), and hazardous materials management. The product serves over 200 large and midsized customers, and has more than 10,000 users; this is a result of being marketed directly (in a big way) in Germany, and through a dedicated network of solution partners throughout western Europe.

Consequently, the Infor Process Group now boasts over 120 employees (with over 80 percent of employees in the research and development [R&D], support, and professional services departments) and over 400 customers (of which 150 are specialty chemical enterprises, 50 are pharmaceuticals, and 200 are food and beverage companies). The group has estimated annual revenues of about $36 million (USD), with license revenue amounting to 27 percent (with an equitable split between the support and maintenance revenues). Europe contributes 53 percent of revenues, and North America contributes the remaining 47 percent.

This continuation of a series comparing SSA Global and Infor Process Group, two contenders in the fierce ongoing competition to be number three (after SAP and Oracle) in the world of ERP vendors, analyzes Infor's acquisition of Adage ERP and Fygir SCP from the former SCT Corporation, and of Datastream Systems. Later articles will discuss Infor's acquisition of Formation Systems and Geac.

See The Enterprise Applications "Arms Race" To Be Number Three for background information and a discussion of vendor similarities. For more information, see Contributing to the Rejuvenation of Legacy Systems in the Enterprise Resource Planning Field. Also see New Vendor Acquisition Strategies in the Enterprise Applications Field for a comparable analysis of SSA Global. The other leading contender is Lawson Software. For a detailed discussion of Lawson, see New' Lawson Software's Transatlantic Extended Enterprise Resource Planning Intentions).

In combination, the two ERP products, Infor Adage and Infor Blending, feature support for the resolution of many process manufacturing "fatal flaws" (see The Fatal Flaws for Process Manufacturers, Fatal Flaws in ERP Software Create Opportunity for Niche Software in CPG Companies, and Process Manufacturing Software: A Primer). Some key differentiators worth mentioning include support for variable weight or "catch weight"; lot traceability to help food processors trace any portion of each batch or lot (for purposes of damage control, the US Department of Agriculture [USDA] requires food processors to be able to trace any portion or product of, for example, a processed chicken); quality management; variable weight-based costing and pricing throughout the supply chain; regulatory compliance; and a comprehensive supply chain management (SCM) solution for process industries.

Challenges

The vendor does acknowledge some technological and functional shortcomings, especially with respect to the Adage product, which still lacks a proper graphical user interface (GUI). Also, Adage often needs to interface with strong financial management products (such as SAP or PeopleSoft solutions), and lacks US Food and Drug Administration (FDA) regulatory compliance for pharmaceutical companies. For that reason, a helpful target division of products would involve using Adage for larger companies in the food and beverage, and chemical sectors, and Blending for smaller companies in the pharmaceutical and consumer products sectors.

In the short term, which means by the end of 2006 (or even earlier), the products are slated for user interface (UI) enhancements (in terms of browser deployment and improved usability for Infor Adage 5.0), and for integration with Infor WMS (i.e., VISUAL WMS) and Infor Global Financials (for the Infor Blending 5.9 release only)—the latter stemming from Varial. The idea is to migrate the Adage 6.0 and Blending 6.0 releases in 2007 to the adopted Infor client (within Corestone) and to integrate them into Infor Global Financials. Also, both products are to be migrated to n-tier architecture, with complete encapsulation of business logic in a manner enabled by service-oriented architecture (SOA). All these short-term and midterm functional enhancements have been driven by user groups, regulatory compliance, and industry trends.

The long-term roadmap, for 2008 and later (and for both product releases 7.0 and later), is to eventually converge the products into an Infor Process ERP product (in a way that is somewhat similar to SSA Global's current forays), using Corestone architecture components, with core process industries applications such as process manufacturing, order management, and costing. By then, the product will also be integrated with Infor Global Financials, Infor WMS, Infor CRM (coming from SyteLine), and Infor SCM.

Datastream Acquisition

Related to the process group, which has many asset-intensive customers (although the Infor Distribution Group may also have many customers with interests in fleet tracking and management), is the acquisition of Datastream Systems in early 2006. The merging parties are working to close this transaction as soon as reasonably possible, and it is expected to be completed in the second calendar quarter of 2006. Datastream, founded in 1986, provides asset performance management software and services to more than 6,700 enterprises (in more than 140 countries), including more than 60 percent of the Fortune 500. Its solutions combine enterprise asset management (EAM) functionality with advanced analytics, to deliver a platform for optimizing enterprise asset performance.

The flagship product, Datastream 7i, delivers an asset performance management infrastructure combining an advanced SOA (which is in tune with the upcoming Infor Corestone platform), with broad enterprise asset management (EAM) functionality, integrated procurement, analytics, and multi-site capability. By using these solutions, customers in sectors such as manufacturing, hospitality, health care, transportation, telecom, facilities management, and government can maintain and manage capital assets. These assets might include manufacturing equipment, vehicle fleets (including mobile assets like forklifts or automated guided vehicles [AGV]), and buildings. These solutions also allow customers to create analyses and forecasts so that they can take action to improve future performance. The Web-based product, which is strong in capabilities such as asset tracking; work order management; scheduling; preventive maintenance; parts inventory; and maintenance, repair, and overhaul (MRO) procurement capabilities, allows users to view maintenance activities across multiple plants. There is also a separate e-procurement package (Datastream 7i Buy), which is integrated with Datastream 7i to provide automatic requisitioning of parts as reserved by maintenance orders, with access to the catalogs of hundreds of MRO suppliers, along with support for internal catalogs.

Furthermore, a calibration module manages tools and equipment, and an e-records and e-signature module enables record keeping for compliance with such regulations as the well-known US Food and Drug Administration Code of Federal Regulations (FDA CFR) Title 21 Part 11. The analytics module provides calculation, contextualization, correlation, connectivity, and visualization tools, for a better understanding of the trends and root causes of equipment performance and reliability (thus enabling visibility and better decision making by pushing data to dashboards, palmtop computers, web-browsers, and pagers). These EAM and manufacturing intelligence capabilities (see Plant Intelligence as Glue for Dispersed Data?), while not yet being at the level of SAP, especially following SAP's recent acquisition of Lighthammer (see Has SAP Nailed Plant Level Leadership with Lighthammer?), certainly raise the bar for Infor in comparison to the capabilities of SSA Global, Intentia, IFS, Oracle, IBS, Ross Systems/CDC Software, Epicor Software, QAD, Glovia, and so on.

Datastream Benefits

Datastream's asset performance management strategy delivers value to customers by connecting critical maintenance and asset information with operational data, in order to improve organizational performance; maintenance can be subsumed under overall corporate strategy, and resources can thus be focused more accurately to enhance opportunity, and reduce risk and cost. With the advent of best practices such as reliability-driven maintenance (RDM) (see Reliability Driven Maintenance—Closing the CMMS 'Value Gap'?), employee safety, and total productive maintenance (TPM), the asset maintenance function has been receiving increasing attention lately within enterprises, and has been elevated above the role of an expense department. However, as long as maintenance remains within the realm of separate enterprise asset management/ computerized maintenance management system (EAM/CMMS) software, management will be missing some mission-critical parts of the "big picture" its enterprise application system aims to present. While CMMS and EAM have optimized inventory levels across plants and improved throughput at lower production costs by reducing equipment downtime and performing preventive maintenance, only an integrated EAM or ERP platform permits a complete view of the entire organization's key metrics for a comprehensive performance perspective (including not only planning, manufacturing, sales, procurement, inventory, finance, and human resources, but also maintenance performance metrics and opportunities for improvement).

With such an integrated platform and inherent information sharing, asset-intensive user organizations should reap tangible benefits:

* Greater purchasing power and better spending control
In theory, integration of ERP with EAM allows better control over purchasing processes (negotiation, decision-making, electronic ordering, spending control), and helps standardize and minimize spare parts inventories.

* Production efficiencies
An integrated system should make it easier to view production schedules to determine the best time to take an asset off line (for example, for preventive maintenance).

* Analysis of equipment failure
An integrated system should provide consideration of equipment downtime in the analysis of supply chain efficiency, and its impact on quality and order fulfillment; following a repair, ramp-up costs can thus be more easily analyzed.

For more information on potential benefits, see EAM Versus CMMS: What's Right for Your Company?.

Given the asset-intensive nature of Infor's customer base and target markets, Datastream's EAM solutions will address a key business need. The combined company will have 24,700 customers in 140 countries (the two companies already have 1,000 common customers). Datastream has more than 6,700 customers on support (for example, Boeing, ChevronTexaco, Pfizer, and GlaxoSmithKline) and a dedicated employee base which should expand Infor's expertise in the manufacturing and distribution sectors, as well as other asset-intensive industries. Datastream's technological leadership in developing Web-architected solutions should also complement Infor's own commitment to assembling cost-effective solutions tailored to customers' specific operating environments. Conversely, Infor's financial backing, global reach, and additional product solutions may provide Datastream customers with a path for continuous operational improvement and long-term growth.

SOURCE:http://www.technologyevaluation.com/research/articles/the-impact-of-the-assembler-strategy-in-the-enterprise-applications-field-18515/

The Total EAM Vision Strategic Advantages in Asset Management

Enterprise Asset Management systems (EAM) continue to point the way into the future for capital intensive industries. The combination of functionalities, asset focussed business intelligence and advanced management consulting have allowed some vendors to provide consistently high results to those industries whose operating model involves the management of large numbers of physical assets.

This specifically refers to industries in the areas of Mining, Oil and Gas, Defense, Utilities and Transport although it does also offer positive benefits for companies in some areas of manufacturing.

The Gartner Group defines EAM as the following:

"EAM consists of asset management, materials management, HRMS and financials"

Figure 1: Complimentary Effects between Managerial Functions in Capital Intensive Industries

The focus and structure of an EAM system recognises the strategic importance of asset management and provides a structure and depth of functionality dedicated to providing clear strategic advantages in these areas. It is for this reason that it is directed at the central role played by maintenance and includes the three additional functional areas in capital intensive industries that have a synergistic relationship with asset management. They have truly evolved into solutions for enterprise performance management in this industry sector.

It represents a key strategy to increase plant capacity, using information technology in lieu of new construction in large, asset-intensive enterprises. It integrates key plant control systems (PCS) and ERP with maintenance activities and functions to reduce downtime and minimize maintenance spending

Confusion in E.A.M

The emergence of EAM as the solution for this style of industry has at times been confused both by clients, as well as by vendors.

Myth 1: EAM are only transactional Systems

While there are lower standard systems that offer only transactional functionality, a true EAM system builds on this data by providing advanced functions in critical areas affecting asset management. For example:

• Risk management and reliability engineering (Including predictive maintenance management)
  
  
• RCM
  
  
• Root Cause Analysis
  
  
• Advanced Workforce and Human Capital management
  
  
• Advanced Inventory Management
  

It is the inclusion of these ranges of functions that EAM systems are able to provide strategic advantages in asset management. Advantages that can separate industry leaders from their competitors.

Myth 2: Misunderstanding of the Areas of EAM

A common ploy by vendors of lower quality systems is to attempt to include other functions as a part of the core functionality of these systems. This effort of re-branding by specific vendors is not only misleading but affects the overall goals of asset management in industry. For example:

1. Addition of CRM (Customer / Client Relationship Management)
2. Addition of SCM (Supply Chain Management)

While these two system functionalities are important parts of managing enterprises., they are not vital parts of asset focussed industries. In fact the use of these systems, functions, in lieu of basic EAM functionalities, can substantially reduce benefits from the overall asset-centric solution. (Note: Basic CRM is considered to be a part of EAM)

An EAM provides a means of generating strategic advantages through the management of physical assets. And uses the issues of Asset Management as key drivers for achieving these advantages.

Recognised Benefits of E.A.M
In Q4 of 2001, the analyst organization ARC stated:

"Fast ROI and Hard Savings Keep the EAM/CMMS Software Market Healthy...The recent success of Enterprise Asset Management (EAM)/ Computerized Maintenance Management System (CMMS) solutions is directly related to strong corporate concentration on profitability. EAM/CMMS solutions are the only ones where a substantial and quick ROI can be realized."

This underscores the ability of these style systems to produce rapid results through advanced physical asset management functionality. The strategic importance of this, in terms of financial and non-financial returns on investment, cannot be overlooked by companies with large asset bases.

The Changing Asset Management Environment

For a corporation to understand the potential impact of EAM it first needs to understand the strategic importance of asset management. The management of physical assets offers a vast area of potential strategic advantage for many companies. A thorough and accurate approach in this area can bring benefits in the areas of:

• Productivity
  
  
• Risk Management
  
  
• Asset utilization
  
  
• Quality of product and of client service
  

When combined with the added benefits available in applying EAM systems this adds potential areas of strategic advantage in:

• Utilization and development of human resources
  
  
• Financial optimization of the maintenance function
  
  
• Reduced inventory holdings
  
  
• Better vendor selection and management
  
  
• Human Capital Management
  

This requires a truly proactive approach to asset management. An approach that involve looking forward to take decisions instead of looking back. Proactivity, when expressed in terms of EAM, means:

• Use of "what if scenarios" and forecasting. This is a vastly under used area of all implementations. The ability of a company to be able to forecast differing scenarios when analysing the asset management function can add substantial value to a company.
  
  
• Accommodation of RCM style analyses
  
  
• Extensive use of Business Intelligence as a strategic asset for managers
  
  
• Providing for the creation of asset specific decision support information tools
  
  
• Allowing for asset policy decisions, in terms of redesign, changes to policies, identification of root cause analysis opportunities
  
  
• Inventory reduction, or increased efficiency decision support information
  
  
• Future workforce planning
  

It does not merely mean reacting to analysis. This practice, although recommended, is a reactive practice and focuses on what has happened. The key to proactivity is in focussing on what could happen in the future and planning accordingly.

Non Financial ROI

An understanding of the strategic importance of asset management requires an appreciation of the non-financial benefits and responsibilities of physical asset management. These are primarily in the areas of risk management associated with safety and reducing the risk of damaging the environment.

Changes to industrial legislation and community expectations have made these areas some of the more critically important to directors of companies. At this point in time the government of England and the United Kingdom is discussing efforts to bring in legislation regarding "Corporate Killing" via negligence in asset management. These trends are set to continue throughout the world.

The Total EAM Vision

The Total EAM vision is one that encompasses all of the areas importance to management of maintenance. Far from just transactional management a strong solution builds strategic advantage in each of the following areas.

Advanced Asset Functionality
The following are some of the functional areas where a Total EAM Vision can provide substantial benefits:

• Whole of life asset care (From purchasing to retirement)
  
  
• Advanced management of Predictive maintenance regimes
  
  
• Advanced PM management (Far beyond "do this now" style functions)
  
  
• Advanced workforce planning both long range and short range. Particularly in terms of "capacity scheduling" and "shutdown management"
  
  
• Abilities for the management of Human Capital
  
  
• Decision support for maintenance strategy decisions
  
  
• EAM style inventory management algorithms (based on probability- "just-in-case" in place of "just-in-time")
  
  
• Comparative life evaluations for equipment under condition monitoring regimes. This is a key strategic function of a base EAM system and one that contributes greatly to decisions regarding capital investment.

SOURCE:http://www.technologyevaluation.com/research/articles/the-total-eam-vision-strategic-advantages-in-asset-management-16994/