Asset Data for Accurate Lifecycle Managementprovide substantial benefits is the driving out of inefficiencies in business processes. Through the captu

provide substantial benefits is the driving out of inefficiencies in business processes. Through the capture, storage, manipulation, and display of historical transactional data, companies can take great leaps forward in the efficiency with which they execute maintenance programs. They can do this, for example, through ensuring that delays in executing work are captured, analyzed, and resolved, or by being able to display trends in performance and cost over time.

Part Two of the series Captured by Data.

The effectiveness of a maintenance task comes from how it manages failure modes, not from the level of efficiency that it is executed with. The original reliability-centered maintenance (RCM) studies revealed that many routine tasks could actually contribute to failure, or to lower cost-effectiveness, by having limited or no impact on the performance of the asset (in effect wasting the maintenance budget). Executing these tasks with greater efficiency would have either have no impact at all on effectiveness, or would possibly even magnify the effects of unsuitable tasks.

For example, after an RCM analyst had spent a lot of time working with a utility company in the UK, it became clear that the reported schedule compliance was not an accurate figure. Schedules were regularly coming in with 100 percent compliance, while the reality was that they were actually performing at around 25 percent.

After some investigation it turned out that the crafts people recognized that most of the regimes that were coming out of the system were either counterproductive, or not applicable at all. So they were fortunately omitted. Prior to installing the EAM system, they were working with job cards in separate systems; once the EAM went "live," these were collated and assigned to all similar assets regardless of operational context.

This is where RCM-style methodologies contribute to the modern EAM or computerized maintenance management system (CMMS) system. By providing the content that the system needs to manage, they are ensuring that the right job is being executed in the right way. This is common sense, and practitioners of RCM have been emphasizing this point for many years.

What is often not emphasized, however, is that having an effective maintenance program in place which is integrated with the EAM system ensures that future efforts of data capture are executed in a manner that supports the principles of responsible asset stewardship. The effect of building a data capture program on the back of an effective maintenance program is to reverse, over time, the ratio of hard data to human knowledge that is available for decision making.

Figure 1. Integration of EAM and reliability-centered maintenance




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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.


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

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:

*





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Federal Contract Management and Vendors' Readiness Part Three: Meeting Federal RequirementsCompanies that are not already offering the capabilities de

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.

This is Part Three of a three-part tutorial.

Part One defined the entry of small vendors into federal contracts.

Part Two discussed dealing with federal contract requirements.

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.



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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

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


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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.



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

MRO and Spare Parts Management ConsiderationsService or spare parts have lately become both a blessing and a curse for many like manufacturers of comp

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.



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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.

Making It Work

Once the crews and their availability have been identified, the scheduling process can begin. The area or crew supervisor first completes a trade availability spreadsheet. The advantage of this spreadsheet is that it provides a common and consistent template that can be easily used with minimal training by all supervisors. Supervisors can record trade availability and time that is not available for scheduling purposes—including vacation and training time. The end result is the total available hours to schedule for each trade.




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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.



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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

Featured Author - Daryl Mather - June 27, 2003

Defining EAM

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.


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

Use CMMS to Improve PdM Performance

Speaking with numerous maintenance professionals across multiple industries, invariably the conversation seems to center on how to create an optimal balance of proactive and reactive maintenance and how to get there. The discussions often come disguised in modern-day labels, such as lean, reliability-centered maintenance (RCM), and total productive maintenance (TPM). However, there's no mistaking the underlying issues: companies need to become better at operating a more stable, planned, and predictable maintenance environment at minimal cost.

Although the figures vary, most maintenance managers would agree they don't like playing the role of firefighter with as many as 40 to 80 percent of requests for maintenance services unplanned or even emergencies. There's much debate on the subject, but it appears that a reasonable target for the ratio of planned to unplanned maintenance is 80:20. Clearly, many manufacturing environments have far to go to achieve this target. Companies that have moved from a highly reactive environment to a more planned environment notice significant improvements. They include

* significant reductions in total downtime;

* lower inventory of spare parts required in stores;

* increased production capacity, as fewer machines lie idle or are in the shop;

* less space requirements for spare parts and equipment that's down;

* fewer rush orders required;

* fewer quick fixes and less mistakes made;

* improved use of maintenance staff;

* less overtime needed to respond to emergencies;

* less stress with a planned shutdown;

* better yield and less scrap, waste, rework, etc.;

* lower total cost of ownership of assets; and

* more predictable and stable production scheduling, so that customer responsiveness is improved.

For companies moving in the right direction, however, there's still some uncertainty as to the optimal balance of reactive maintenance, preventive maintenance (PM), and predictive maintenance (PdM) for their particular environments. Generally, organizations that are well on their way to building a planned environment do so using a high proportion of PM, as opposed to what's perceived as more expensive PdM technologies. Predictive-based technologies, however, are becoming less expensive. Today, you're seeing more general technology improvements, which change the point of optimal balance. Thus, even the more sophisticated maintenance departments feel the best way to determine the optimum is on a trial and error basis.

A computerized maintenance management software (CMMS) or enterprise asset management (EAM) system is a useful tool to build an accurate equipment history and provide comprehensive analysis capability. With a realistic history, companies can balance the cost of replacing the equipment versus maintaining it through an optimal mix of reactive, PM and PdM maintenance. A CMMS can help calculate the total cost of downtime and poor quality, as part of the optimal balance calculation. Perhaps surprisingly, not many companies track these costs.

Additionally, the CMMS can help identify the root cause of maintenance-related failure or quality problems, so that the frequency of maintenance can be reduced through prevention, (such as the training of operators) or condition monitoring, (such as a vibration analysis). This is critical to the success of any maintenance program.

Begin with criticality analysis

Moving too quickly to either end of the reactive/preventive/predictive continuum can be a costly exercise. For example, monitoring the condition of each and every light bulb in your facility so that they might be replaced just prior to failure is massive overkill. On the other hand, however, allowing a critical component of an expensive asset to run to failure is unthinkable. Maintainers have the option of monitoring conditions (e.g. vibration), whereby they can save millions of dollars in downtime costs. These are obvious examples. With most assets, however, it can be a long and painful process to identify the optimal mix of reactive, PM, and PdM maintenance.

To determine the most cost-effective approach to maintaining an asset, different questions are posed for each component. This is often referred to as criticality analysis and is part of an RCM program. Some of the more important questions include the following: What does this component do? What happens if it fails (for example, no impact versus catastrophic)? What's the most cost-effective maintenance program required (such as reactive, PM or PdM)?

A few of the more sophisticated CMMS packages will assist in determining and documenting some or all of the answers to these questions. Examples of the type of data collected and analyzed include the following:


source
http://www.technologyevaluation.com/research/articles/use-cmms-to-improve-pdm-performance-17190/

EAM versus CMMS: What's Right for Your Company? Part Two: Integration Concerns

Many of the benefits from enterprise asset management (EAM) software result from the ability to exchange data from other systems and subsystems. These interfaces are not trivial in design or construction. For example, one of the simpler interfaces involves inventory. Namely, EAM software needs access to inventory to determine the availability of repair parts, whereas your manufacturing system needs access to inventory to dispense ingredients or bills of material (BOM). Typically, EAM software will have its repository of inventory consisting of repair parts. On the other hand, a manufacturing ERP system will have its repository of inventory, which can accommodate ingredients, BOM, and repair parts. Designers of manufacturing systems are not that short-sighted to think that every company has computerized maintenance management systems (CMMS) or EAM software.

Some basic questions include

* Where is the official inventory maintained?

* How do you keep the inventories in sync?

* What flares will go off when they go out of sync?

* How do you put them back in sync?

However, in the software development world, these are difficult questions to answer and design for; moreover these are just the tip of the interface iceberg. The table below lists some of the potential EAM interfaces.

Granted some of these may be overkill, but, even if only half are needed or desired, the interface issues and construction represent a major commitment of time and resources, now and in the future. The good news is that if you can satisfy all of your software needs from a single source, which can be done through IFS and Intentia, your interfaces are most likely already resolved for you*. Again, this is a strong selling point for IFS and Intentia.

However, while most companies recognize the value of EAM software, many have not even taken the first step. These companies, of necessity, already have existing systems to control their inventory, payables, manufacturing, payroll, and other functions and, due to time and monetary considerations, are not likely to give to them up for new, fully integrated software. The bottom line? Companies selecting a new ERP system should include a review of the EAM functions in each product, particularly in process and asset intensive industries where good EAM is frequently seen as being critical to the business. However in most cases, companies will acquire EAM software but the interfaces to external systems will have to be constructed.

When providing a stand-alone solution, vendors may oversimplify the interface issues by suggesting the availability API's (application programming interfaces) or software-based integration services. They may also pressure you into buying more modules than you need. These statements may have validity. However, in the case of interfaces, it may be wise to be the "Doubting Thomas as you move to Missouri, the show me'" state: this is clearly a case where you must do your homework beforehand and not solely rely on the claims of the provider. Request references from clients who have actually created interfaces; determine the time and effort required; check the cost of any customization to meet your specific needs as a so-called "standard" interface rarely meets these; and verify that there are no degradation of performance on either side of the interface—existing and EAM software.

This is Part Two of a four-part note.

Part One defined EAM and CMMS.

Parts Three and Four will present an analysis of two major vendors.

*In this note offerings from software vendors IFS AB (XSSE: IFS) and Intentia (XSSE: INT B), two fellow Swedish providers of enterprise business applications for mid-size and large enterprises, are used to help illustrate some of the advanced features of EAM.




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http://www.technologyevaluation.com/research/articles/eam-versus-cmms-what-s-right-for-your-company-part-two-integration-concerns-17212/

EAM versus CMMS: What's Right for Your Company? Part Four: IFS and Intentia Responses

Although both vendors, IFS AB (XSSE: IFS) and Intentia (XSSE: INT B) are showing surprising resiliency in a difficult market, they are often still regarded as just regional rather than uniformly global players. For example, still nearly two thirds of IFS' sales are in Europe, almost a third is in North America, and it has sporadic single digits percentages elsewhere in the world. Conversely, while Intentia might have better recognition in Australasia then IFS, but it is still a fledgling vendor in North America, while both vendors are stalwarts in Europe.

The reason why IFS has made many more inroads in North America (with a 300-strong customer base) than Intentia could in part lie in the fact that IFS has long established a local marketing center there and thus can deliver a better-attuned message. As previously mentioned, IFS is also more aggressively moving forward with a partnership strategy to further grow its business outside Europe. To date it has tackled vertical markets in various regions (and even countries like China through a joint venture with IFS UFSoft) where the barriers to entry are reasonably low.

However, if IFS truly wants to be a global player, it will have to bolster its image as a company with strength in the target verticals, regardless of its location. A possible remedy to IFS' global image predicament and the long run high cost of direct selling could be a greater shift of focus to its still relatively undeveloped indirect channel, which will be executed through a number of announced market and industry-based partnerships. This focus on the underdeveloped indirect channel has been a major success factor for many mid-market vendors.

Also, as the vendor becomes eligible for future larger deals, IFS is also likely to become more focused on strategic partnerships with some of the large system integrators and consultants (such as CAP Gemini Ernst & Young, IBM, Atos Origin, or NEC) in order to cover larger multinational customers. While IFS' opportunistic "can do" corporate culture and responsibility for most of its own implementations have served it well during the early years of its ascendance, the endorsement of the above-mentioned partners should help it establish credibility more quickly in IFS' given markets than it could ever do it on its own.

On the other hand, Intentia has been tardy to partner with any non-IBM technology provider, and its partnerships in the past have been rather reactive to a sporadic opportunity or customer request than really strategically proactive. While Intentia's direct model helps it with the customer intimacy in a way similar to IFS (except in Asia where Intentia utilizes channel partners), nevertheless, the direct model hampers Intentia's faster expansion through distribution channels, visibility, and noise created by system integrators (which, in fact, will likely have promoted the competitive products).

Last but not least, one common streak that is pertinent to this article is that both vendors' roots stem from the maintenance and asset management arenas of some twenty years ago. For Intentia, this area was in aerospace and defense (A&D) and for IFS, it was the utilities sector. Both vendors seem to be returning to their roots in their quests to return to prosperity. For example, during its early years, IFS had built up specific expertise in relational database technology, and linked this with the knowledge of preventive maintenance, which it had acquired in connection with assignments in the nuclear power industry. This resulted in the development of IFS Maintenance, the first software product of IFS, which was launched in 1986. However, only in 1990 did the vendor release the first version of its flagship product, IFS Applications.

Thus Intentia and IFS should have a significant head start compared to some ERP vendors that have belatedly chosen to support maintenance management by developing add-on plant maintenance or asset management modules to their existing product suites. Rather than developing scheduling, project management, inventory management, purchasing, quality management, and other core maintenance capabilities, Intentia and IFS will have adapted their existing work-order-centric manufacturing functionality to support these maintenance needs. Other enterprise resource planning (ERP) vendors might have addressed these capabilities by acquiring a computerized maintenance management (CMMS) or an enterprise asset management (EAM) package and integrating it into their product suite. However, the downside here is that these solutions typically will not have the seamless look-and-feel nor the unified data and architecture of the internally developed ERP and EAM modules.

On the other hand, some best-of-breed CMMS/EAM vendors may provide applications program interfaces (API) between their products and selected, usual-suspect ERP suites. Nonetheless, these are subject to true strategic intentions and cooperation between these disparate ERP and CMMS/EAM solution providers.

This is Part Four of a four-part note.

Part One defined EAM and CMMS.

Part Two discussed integration concerns.

Part Three began the analysis of two major vendors.



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http://www.technologyevaluation.com/research/articles/eam-versus-cmms-what-s-right-for-your-company-part-four-ifs-and-intentia-responses-17214/

Selecting a CMMS System

The secret for the successful implementation of a computerized maintenance management system (CMMS) or a maintenance, repair, and overhaul (MRO) system lies in the level of knowledge users have about the maintenance process. Every airline has its own maintenance programs and manuals, and different types of aircraft. Maintenance can be very different for a turbo propeller airplane, a jet engine airplane, or a helicopter, although their core maintenance activities are similar. Since geography, environment, work environment, etc. combine these differences, airlines must have qualified staff that know the maintenance process, especially because they will do more than just technical, monitoring, and engineering tasks and their related paperwork.

One of the key ways in which a CMMS or MRO system can be helpful is by correctly defining inputs and outputs in the process's information stream. Yet, the most important thing is clearly identifying where we need help from such a system. As I mentioned before, some systems can be partially implemented, that is, users can implement only those modules that will help carry out the process and they become responsible for benefiting from such applications and the information they process. If the system is only used to create graphs or to issue reports and documents, it's very likely that it's the system's potential is being wasted. Moreover, users have to pay high license or software rental fees for functionality they are not using, which ultimately affects an airline's operating costs.

On the other hand, when users have deep knowledge of the maintenance process—from its basic activities to the high-level information that will be processed and analyzed—a significant percentage of success is guaranteed, even if no system has been implemented. We could analyze and discuss the key factors and process indicators that serve the decision-making process, but that's a subject for another article. What is important is to keep in mind that knowledge of these factors and process indicators will make it easier to select a system from those currently available in the market.

To illustrate the importance of in-house expertise of processes, I recently had a conversation with an aerospatial engineer who used to work for British Airways. He told me that for British Airways to become as successful as it is, the company had to go through a ten-year process that involved analyzing their processes, systems, and culture. In other words, the company had to understand its own processes.

He continued to explain that these factors and acquired experience, when combined in an appropriate and balanced way, will lead to a CMMS or MRO system that benefits its users. A system or set of modules that focuses on basic maintenance and service forecast activities can be efficient for a specific area. However, the situation becomes more complex as users need to automate or systematize more components of the maintenance process; thus this is where the importance of knowledge comes in.

Mobile computing: an option for a CMMS or MRO system in the aviation industry

Currently, systems focus more on how mobile computing can benefit an airline. For example, when I was working with the team responsible for the implementation of an automatic data collection system for the hangar, we considered making the system available for the technicians so they would have the information they needed close to the airplane they were working on. This focus brought important benefits, such as having maintenance data the same day it was generated. Of course, this process involved research on the best available equipment, such as access points, types of antennae, cabinets, computers, etc. that would allow us to install a wireless network inside the hangar and place computers around the airplane. We were able to generate arrays and services from the airplane, avoiding traveling and double data capture, while the supervisor took notes and then captured the information in his PC, which was connected to the system. Then we were able to use a laptop and a personalized digital assistant (PDA) to prove that our plan was feasible and didn't compromise the server's or system's operation.

As a result of this implementation which leveraged the knowledge of in-house processes, we obtained viable solutions, such as material and component query and request through the system, generation of documents for non-routine jobs, staff registry, etc., while technicians and supervisors could stay close to the aircraft. Technicians could continue working while the correct personnel sent them the material or documents. This was another benefit of registering the work cards that were being issued, and it proved to be very useful for the maintenance staff working on-line. The next step was expanding the benefits of mobile computing to the aircraft platforms and the positions fixed by the airports, which is only possible in some airports.

This implementation was the result of the fact that CMMS or MRO systems for the aviation industry should have or should develop the flexibility to accommodate mobile computing. In general, these solutions are very affordable and can be implemented in small or large airlines or in independent repair shops, because their costs are lower than CMMS itself. This allows the expansion of the system's scope so it can operate both inside and outside the airline.

However, to install a wireless network and radio frequency antennae, the safety and integrity of the data must be ensured—this subject will become more important as the use of wireless networks spreads worldwide. There are several mobile computing providers in the market as well as large, diverse, powerful, and affordable equipment, that allow the design of a solution to adapt to each airline or repair shop, thus adding flexibility to the CMMS or MRO system in place.

Which is the best system?

There are many CMMS and MRO systems in the market, each one with specific features that can bring benefits to airlines or repair shops. Moreover, since each airline must consider the solution that best matches its needs, it is hard to make a general statement. Some systems address maintenance jobs, and their control and forecasting directly. They have turned out to be very effective and contribute to the success and productivity of some airlines. On the other hand, some systems have been developed in such a way that they can represent a very robust and complete solution. However, the best system is the one that truly satisfies an airline's needs.

SAP has a very popular system that has been implemented in several airlines, either as a standalone solution or with other systems that address maintenance-related processes. Certainly, this system has some pros, and perhaps the two most important benefits it brings are organizing and controlling defined processes; and providing visibility to what happens to management positions. However, it lacks some crucial features that are specific to airline maintenance processes. Even though this absence has led to the development of interfaces, they are costly and have to be justified by the benefits that the system will bring to the airline.

Thus, selecting the best software starts by defining the airline's problems or areas that need to be improved. It is followed by analyzing the solutions that best fit the airline's situation and the goals it wants to achieve over time. Given all of these factors, the selection process depends on the experience and knowledge of the maintenance processes that are essential to the airline.





source
http://www.technologyevaluation.com/research/articles/selecting-a-cmms-system-17997/

CMMS Templates for Effective Implementations Part Two: The CMMS Industry and ERP

The CMMS industry is divided into various styles of system providers, all of which are defined within the book CMMS: A Timesaving Implementation Process. For the requirements of this position paper we will only be speaking about the two main types. Those are ERP (Enterprise Resource Planning) and EAM (Enterprise Asset Management) style systems.

Figure 1.

This is Part Two of a three-part article that is based on the book, CMMS: A Timesaving Implementation Process by Daryl Mather.

Part One discussed the strategic importance of Maintenance Management.

Part Three will present a template for successful implementations of CMMS.

ERP Systems

The modern day ERP system is built on the needs of management of production planning and the optimization of resources to carry out these plans. Effectively they are the products of the MRP and MRP2 theories and methodologies. There has been an enormous expansion in the use and implementation of these systems due to various factors. Principally however the manufacturing sector, at a global level, is immense. Secondly there has been the trend towards financial management requirements as detailed above. ERP systems tend to be outstanding performers in these two areas in particular. However it needs to be understood that the management of maintenance is not, and never has been, a part of the MRP methodologies.

Thus the implementation of these systems is generally not done with the requirements of the maintenance function in mind. Some of these style systems have developed reasonably strong maintenance management functionality, but the overall focus is not on the management of resources and information in the manner required by maintenance professionals.

EAM Systems

EAM systems have descended from the needs of maintenance in capital intensive industries. When we commonly refer to as CMMS we are, more often than not, referring to the functionality that is encapsulated in the large EAM style systems. Today they are truly enterprise level systems and include the relevant sub systems for managing finances, materials, human resources and even sales in some systems.

The EAM system is unique in its model for management of materials for capital intensive industries, and maintenance functionality in general. This is further given credibility by recent moves of major ERP producers to develop and market EAM style systems.

The Market

The market has grown increasingly competitive in both these areas. In the beginnings of the industry it was very much a vendors market, however today it is more and more a market determined by the buyer. The options among the low, medium, and high-end systems are staggering.

Within the next few years those CMMS providers that do not comply with the basic requirements of maintenance, will find themselves on the declining end of the CMMS market, or even extinct. Maintenance can and should be more demanding regarding CMMS functionality and pricing, the ability to find a good deal among providers is greater than ever and is set to become increasingly so. Yet the great many of the buyers in today's sales are blissfully unaware of many of these factors and distinctions, leading even further towards the failure of systems and to their outright overpricing in many instances.

During the last two years in particular the sales of large end CMMS systems has dropped off significantly. There is a large amount of discontent and disillusionment over what benefits can be provided and how much needs to be invested to receive these benefits. There are a great number of CMMS disasters also. These include projects that do not deliver the promised benefits or the promised changes in the operations that clients were originally offered. Although this market is starting to pick up again, it remains an area of doubt and of overriding discontent.

Recent development in this area is the employment of web-based functionality to deliver the maintenance administration function. The implications in this area are immense, and will see the emergence of a whole new range of services that will be offered and that will lend themselves to outsourcing style arrangements. However current technology leaves a great deal to be desired in terms of delivering comparable functionality

Conventional views on software development and sales tell us that this will be not allow ASP's to be truly competitive in today's marketplace. However recent surveys by respected commentators in the area show major increases in the application and use of ASP systems — mainly in the small to medium range companies. This appears to be due mainly to the expense and complexity of major large-scale systems.

Therefore it can be seen that the advanced functionalities of the major large-scale systems may have reached the point of diminishing returns, whereby companies are deciding to buy systems with less functionality due to price considerations.





source
http://www.technologyevaluation.com/research/articles/cmms-templates-for-effective-implementations-part-two-the-cmms-industry-and-erp-16919/

Maintenance Software--How to Negotiate Successful Contracts with CMMS Vendors

When negotiating a contract with a computer maintenance management system (CMMS) vendor the guiding principals and definition of the project must first be determined. Deliverables, pricing options, payment terms, continuance, product and service quality, and liabilities are additional areas that must be considered in negotiations.

Many people find negotiating contracts intimidating, regardless of which side of the table you happen to be on. This is understandable given what's at stake—a price, quality of product and service to be provided, and a long-term relationship. As a result, some companies prefer to retain a lawyer, accountant or consultant to help them through the process.

The following are some key elements found in a typical contract with a CMMS vendor. This by no means, however, constitutes a legal opinion. Rather, it provides a basic understanding of what might go into the contract from a technical perspective.

Guiding principles

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Mutual gain: Building a true partnership with your CMMS vendor requires a solid contractual foundation that's fair to both parties. It's too easy to draft terms that favor one party over the other, especially when there are major differences in the size of the companies entering into the contract. A contract, therefore, should allow either party to back out of the relationship at any time and remain whole (value for the customer in exchange for reasonable profit for the vendor).
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Single contract: As much as possible, strive for a single contract, even if multiple vendors are involved. This avoids vendors pointing fingers at each other, while you get caught in the middle lacking satisfactory service.
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Clear roles and responsibilities: What are the expected deliverables from the vendor? What's the timing and at what cost? In turn, make sure the expectations of the vendor are well understood, such as what needs to be completed ahead of implementation.
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Keep it simple: The document should be easy to read and understand. Maintainers are frustrated having to wade through pages and pages of complex legalese.

Definitions

Every contract should begin by defining common terms used throughout the document. For example, "software materials" might be defined as "the XYZ company software in object code and source-code format, and all documents—including but not limited to—specifications, flow charts, diagrams, and user manuals, provided by XYZ company to the supplier under the terms of this contract." The document can then define some of the terms within the first definition.

Deliverables

The contract must specify what goods and services are being purchased. A detailed software specification is usually attached as an appendix. Other deliverables include documentation, hardware, data conversion services, implementation assistance, training, and ongoing support.

It's essential to be as clear as possible in terms of what you've purchased. For example, how many copies of the software did you buy? Which sites within your company can use the software? Can you sell access to the software by suppliers and customers? What type of training comes with the package, for what audience, at which location, for how long, at whose expense?

Pricing options

Price is fundamental to any contract. Some of the more common pricing options include the following:

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Per module, per concurrent user: Some CMMS vendors have adopted this scheme for larger installations. It's the closest thing to paying only for what you use. For example, suppose the vendor charges from $100 to $200 per concurrent user per module. If a maximum of forty users will be logged into the maintenance module at any given time, twenty people working on the inventory control module and four people maximum for the purchasing module—your cost would be 40x$200 + 20x$150 + 4x$100 = $11,400.

When the twenty-first user tries to log into the inventory control module, access is denied and a polite message explains that you've reached the maximum number of users for that module. Some systems will automatically log out a user, if the activity level drops to zero for a pre-determined period of time.
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Per concurrent user: One of the most popular pricing options is based on the maximum number of users expected to be logged onto the CMMS application at any given time, regardless of which module they're currently using.
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Per seat: Many CMMS vendors still insist on a per seat charge, regardless of how many users may be running the application concurrently. There may be a volume discount available for companies with a large user base. One difficulty is how much to charge remote users with limited access to the software via the Internet, for example to submit work requests).





source
http://www.technologyevaluation.com/research/articles/maintenance-software-how-to-negotiate-successful-contracts-with-cmms-vendors-17195/

EAM Versus CMMS: What's Right for Your Company? Part One

Enterprise asset management (EAM) software and computerized maintenance management systems (CMMS) continue to grab headlines as a realistic way to reduce expenses and increase revenues. For one, maintaining an adequate level of repair and 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 a no-option during depressed economic times. Extending into the customer base, this applies as much to standards of service as it does to product quality.

What attracts companies to this class of software is that the savings are tangible and real—you know, the kind that you can take to the bank. Consequently, the advantage that EAM/CMMS has over other types of enterprise applications is that its return on investment (ROI) is often reasonably quickly achieved and easily quantified. Namely, it is a relatively straightforward exercise to demonstrate the bottom line value provided by optimized utilization that results from optimally maintained production equipment and the facility where it is housed.

This article looks at where CMMS ends and EAM takes over, with particular emphasis on features and functionality of EAM software. If you are unsure of the capabilities of CMMS and need a quick refresher course, read the TEC article entitled, CMMS: A Tutorial.

Offerings from software vendors, IFS AB (XSSE: IFS) and Intentia (XSSE: INT B), two fellow Swedish providers of enterprise business applications for midsize and large enterprises, will be used to help illustrate some of the advanced features of EAM.

The remainder of this article compares CMMS and EAM software and explores, in more detail, two key differentiators: integration concerns and reliability-centered maintenance (RCM). The article ends with a background on Intentia and IFS, and with a general discussion about enterprise resource planning (ERP) vendors' foray into the EAM/CMMS arena.

This is Part One of a four-part note.

Part Two will address integration concerns.

Parts Three and Four will present an analysis of two major vendors.

Comparing CMMS and EAM

Many regard EAM as CMMS on steroids, which is an oversimplification and does not paint the true picture. Typically, CMMS deals strictly within the confines of the work order and preventive maintenance activity. Specific functions include





source
http://www.technologyevaluation.com/research/articles/eam-versus-cmms-what-s-right-for-your-company-part-one-17211/