Knowledge is Power

You face increasing expectations for asset management capabilities. According to the ARC Asset Management Trends November 2019 report, these expectations are driven largely by new requirements to support digital transformation initiatives. The result is a need for greater connectivity, visibility and information-sharing both from within and outside of enterprises.

Additionally, you must maintain low operating budgets while increasing efficiency, and you need to optimize operations to sustain success.

One way to address such challenges is investing in a comprehensive asset-management strategy. By executing a well-planned, comprehensive approach and implementing the right technology, you can transform maintenance from an expense into a strategic, competitive asset.

According to ARC Strategies July 2019 report, “Rethinking Asset Performance Management,” successful asset management requires close cooperation between the maintenance, reliability, process engineering and operations functions in an industrial facility. New digitalization tools can help make that cooperation easier.

Focusing on an asset-management strategy can improve a range of metrics, such as overall equipment effectiveness (OEE) and return on net assets (RONA).

In turn, these metrics contribute to aggressive productivity targets, including various forms of risk mitigation, data-driven decision-making, workforce empowerment and predictable expenditures.

Maintenance is Central to Operations

Because equipment maintenance is one of the largest single controllable expenditures in a plant, it must be included in a life-cycle plan. It also should be an integral part of any reliability improvement program, because it’s critical to machine throughput, availability and essential spare-parts stock.

Once you’ve organized your storeroom and have a repair strategy in place, you can optimize spare-parts inventory and reduce the number of unnecessary parts. Digitally enabled platforms provide ongoing visibility into your installed base.

Research Shows Why Asset Management Must Be a Priority

Many manufacturers struggle to prioritize the time and investment needed to put a comprehensive asset-management strategy in place, simply because so many other expenses compete for their limited budgets. But trends in manufacturing employment and other factors are converging to make asset management a major priority.

Case in point: The U.S. Bureau of Labor Statistics estimates a shortage of more than 2 million manufacturing workers by 2025, with more than 10,000 baby boomers retiring daily. According to LNS Research in their 2019 Connected Worker e-Book, this impacts manufacturers as valuable skills, experience and institutional knowledge are lost.

Although this intelligence gap appears daunting, an asset-management strategy is relatively simple to initiate. Especially if you rely on existing relationships with components distributors and vendors to develop customized, scalable solutions.

Some of the benefits of comprehensive asset management include:

Overall Equipment Effectiveness (OEE): Driving uptime is key to a smart asset-management strategy, because it’s focused on assuring the people, parts and processes are optimized to support the equipment. It also provides trend data visibility into asset performance by both machine and shift, which supports continuous improvement priorities.

Return on Net Assets (RONA): Reducing inventory, maintenance costs and the number of downtime events raises productivity while driving financial performance and predictability.

Empowered and Engaged Employees: With fewer maintenance workers, those who remain need the right technology and tools to make good decisions about supporting plant performance. According to LNS Research, the next generation of employees entering the workforce and advancing through the ranks are digital natives with an entirely new set of perceptions and expectations about technology and attitudes about work in general.

Also, data gathered and analyzed as part of the process can be used to implement future improvements, such as developing a roadmap for managing the obsolescence and migration of aging equipment.

To justify capital expenditure projects, maintenance needs to be considered central to productivity. Your storeroom is the starting point for strategic maintenance improvement practices, such as minimizing equipment life-cycle cost and maximizing production equipment performance.

Getting Started

Evolving asset management into a proactive, strategic component of better-managed manufacturing facilities can be done in phases, following these steps:

Step 1: Evaluate Needs, Set Goals. The first step in any asset-management strategy is examining your current situation while keeping in mind your business priorities, such as process validation over uptime or environmental impact over rate.

To establish a baseline for improvement, first understand your operation’s process hierarchy to determine equipment priority and thus risk.

Second, understand your equipment’s serviceable components and their life-cycle status. For example, are the components new, available, repairable, replaceable or obsolete?

Finally, understand your storeroom content and identify all other locations holding spare parts.

This data will inform future decisions and allow immediate inventory optimization. It also will support risk mitigation on the most critical equipment, and provide the basis for all future management of your plant assets, including preventive maintenance (PM) program optimization, storeroom optimization, machine-builder changes and warranty capture.

Once you have completed data collection, assess critical areas of concern, outline needs for improvement, and define your objectives so you can build an attainable asset management plan.

Step 2: Design an Asset-Management Strategy. Your goal-setting activities will yield the building blocks for your asset-management strategy design, which likely will include these elements:

• Maintenance, repair and operations (MRO) process management redesign.
• Reporting and dashboard creation.
• Excess spare parts burn, selloff, and/or vendor-managed agreement.
• PM activity changes.

MRO process management redesign: A critical step is establishing best practices for part repair or replacement. Minimizing your stock, optimizing your repair process and building an actionable reporting structure is the most sustainable way to maximize your automation investment.

Reliability improvement uses a process risk assessment to track and understand the consequences of process and equipment failures, and recommend priority actions.

Optimizing your repair process involves keeping track of where each individual component is in its life cycle. When a component on the line fails, you document where, when and why it failed, and determine if it’s under warranty.

To keep track of warranty detail and ease the process, the labeling system in your storeroom should include warranty information for each part to track its eligibility. Effectively managing your organization’s warranty recovery can significantly contribute to the operation’s bottom line. Parts also should be tracked when sent for repair.

Typical savings categories for effectively managing MRO repair include:

• Repair price vs. new.
• Warranty recovery.
• Inventory and carrying cost reduction.
• Administration.
• New purchase and repair reduction.
• Increased production uptime.

Having a person electronically track this data can help identify opportunities for system and process simplification or improvement.

Reporting and dashboard creation: This phase can come in many forms and be accomplished in many ways.

You might decide during the evaluation and goal-setting stages that an OEE information system is a necessary investment to create dashboards showing uptime, production rate and quality. The MRO process management redesign mentioned earlier also can provide significant information to be built into a usable and actionable reporting tool.

PM activity change: The more aware you become of your facility’s needs and challenges, the more fine-tuned and efficient your PM activities will become. You might choose to use vendor specialists with the resources to develop and sustain a PM program through scheduled service visits, fully warranted replacement parts, and 24/7 remote troubleshooting — freeing your personnel to operate the equipment and manufacture products.

Step 3: Implement Your Unique Solution. After establishing the right baseline of your facility and designing a plan that supports your business needs and mitigates your risk priorities, your asset-management investment will be pointed, graduated and impactful.

The structure of your plan determines the implementation path. For example, you might be able to use your existing staff and processes to implement simple, immediate point solutions such as inventory disposition or burn-off. But when it comes to more complicated process implementations or redesigns, such as an MRO process redesign, seeking an external specialist to design and execute the right implementation plan might be an option.

Step 4: Measure and Continuously Optimize the Process. The most successful asset-management strategies evolve as equipment, process and people change. Therefore, be sure to investigate digital technology tools that provide a visual dashboard of critical plant assets and equipment changes.

Use Case of Improved Uptime

A successful asset-management strategy helps you maximize uptime and minimize unnecessary costs, allowing them to focus on what they do best — producing quality products and keeping customers happy.

This was the experience of a leading heavy equipment manufacturer that previously struggled with a lack of clear metrics and inefficient inventory-management practices at its transmission manufacturing plant. Its inventory growth and stock inaccuracies were leading to higher carrying costs and frequently putting its Midwest plant at risk for incurring substantial downtime.

By relying on asset-management tools for its inventory management, the manufacturer realized an inventory reduction valued at $1.9 million. The storeroom assessment identified more than 41,000 specific line items, showing the plant was carrying about 20,000 more parts than managers realized.

The Right Strategy

Leaders at smart companies like this heavy equipment manufacturer know that successful asset-management programs maximize uptime and offer other profitability benefits. With the right asset-management strategy in place, you can achieve sustained growth and competitiveness.

^{The Journal From Rockwell Automation and Our PartnerNetwork™ is published by Putman Media, Inc.}