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2020‐01‐09
1
Maintenance Parts Excellence Program‐MPE Introduction – Systems and Tools (105)
Don M. BarryAsset Acumen [email protected]
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Important
This document is not to be released to any third party without the prior consent of Asset Acumen Consulting. It contains copywrite information, the disclosure of which would likely cause material financial harm to Asset Acumen Consulting, prejudice its competitive position and interfere with its ongoing or future contractual or other negotiations. The document also contains personal information as defined in the Privacy Act(Canada).
© 2019 Asset Acumen Consulting
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My biggest Parts challenge!
• Review Challenges from Day 1
3
• …
• Day 1
• Leadership and Control
• Maintenance Parts Management Pyramid of Excellence Overview
• An approach to creating a Maintenance Parts Management Strategic Plan
• KPIs for Maintenance Parts Management
• The importance of Maintenance Parts in ‘effective’ Maintenance Execution
• Day 2• Inventory Policy Management Dynamics
• Inventory Planning
• Asset Life‐cycle Integration
• Inventory Optimization
• Procure and Repair
• Day 3
• Implementing Maintenance Parts Management
• Technology and Maintenance Parts Management
• Impact of Change Management in Asset Management Initiatives
• Spares Provisioning & Inventory Optimization
• Key Inventory Issues
• Types of production Inventory
Presentation Agenda
4
• Day 4
• Managing Risk and Cost in Parts Management (with case studies)
• Risk and Cost Management
• Setting the Reorder Point
• Setting the Reorder Quantity
• Reliability‐Based Spare Parts Management
• Determining Excess Inventory
• Developing Store Room Layouts, Improvement Projects, Re‐organization,
• Storeroom Measures and KPIs
• Maintenance Parts Purchasing Insights
• Day 5• Going Deeper in Asset Life‐cycle Initial Spare Parts Tactics Setting
and Monitoring Goals
• Partnering with Others
• Benchmarking performance
• Managing repairable spares
• Managing capital spares
• Putting the 5‐Day Maintenance Parts Excellence Course into Practice
• Next Steps
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Training Mapping Models and Icons
• Models will be shown throughout the training.• To assist in understanding the flow and relationships
• Reminder Icons are to help you understand the intent of the presented materials
• Examples
• Hints
• Exercises
5
Example
‘Hint’
• Manufactures• Reutilize• Product Tear Down
• Inventory Management• Expert Systems• Distribution Management
• Warehouse Mgmt• Stockroom Mgmt• Transportation Planning
• Optimal Service and Inventory Mgmt
Unit Sourcing Inventory Management
• Content Management• Substitutions• Category Management • Vendor Managed
Inventory• Supplier SLAs• Supplier Warranty
Redemption• Re-utilization Strategies
• Demand Management• Service specific
forecasting algorithms• Part Criticality• Inventory Effectiveness• (Multiple replenishment)
Inventory Echelon Mgmt• Automated
replenishment plans• Inventory Surplus
Management
•Emergency cycle times•Kitting•Vehicle / Remote Inventory•Delivery Strategies•Reverse Logistics•Exception management•Multi-echelon deployment•Route optimization
•Parts Availability•Parts Acquisition Time•Systems Availability•Distribution Quality•Parts Quality•Parts Costs•Inventory Turnover•Inventory Reserves
Delivery KPIs
Pre-installation Asset Planning
Installed Asset Life-Cycle
Mgmt
Post Life-cycle Mgmt Support
Many elements of the Maintenance Parts Value Chain need to be well managed to meet business asset demands across the Asset Life‐cycle
Asset Life-Cycle
6Adapted from Asset Management Excellence”, by John D Campbell & Andrew K S Jardine, Joel McGlynn
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Materials Management Model
Procurement and Parts Repair
Procurement and Parts Repair
LogisticsLogistics
Inventory Planning / PolicyInventory Planning / Policy
KPIsKPIs
Simple model for Materials Management Optimization
7Adapted from Asset Management Excellence”, by John D Campbell & Andrew K S Jardine, Joel McGlynn
In this session we will focus on key data systems support elements of Control
8 Maintenance Parts Management Excellence Pyramid
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Introduction to Maintenance Parts Management System options
9Simplified placement of the role for Maintenance Parts Management
Using Technology in Work Management
Identify / Initiate Plan
Monitor Equipment
Equipment Hierarchies Equipment
Configurations Equipment criticality BOMs Control Systems
Intitiate Work Preventive (PM) Predictive (PdM) Detective CBM Corrective Lubrication Repair
Plan Work Type Failure Codes Job Plan Instructions Materials / Tools Craft / Resources Time Health, safety,
Environmental, Regulatory compliance
ScheduleTask / equipment prioritiesRegulatory complianceOperations scheduleEquipment availabilityParts / Tool availabilityResource availability
Assign Coordinate with
Operations Schedules Emergency WO
management
Execute Materials Tools Resources Equipment Health, safety,
Environemental, Regulatory compliance
Report wrok completed Return tools Return unused materials Dispose of used
materials
Schedule / Assign Execute
Analyse MTTR analysis MTBF analysis WO completion analysis Planned vs Corrective
Maintenance hours % work orders planned % work orders
unplanned % Backlog Annual maintenance
costs
Analyse
Technology Tools
Process Steps
•CMMS•Expert Systems•MTBF analysis•Document management•Scada, GIS•CBM•Bar Coding / RFID
•CMMS•Document Management•Project Management•Parts Inventory visibility, planning and forecasting
•CMMS•Mobile communications•Bar coding / RFID•Integrated Purchase Requisitions / Orders•Parts order visibility
•CMMS•Document Management•Mobile communications•Integrated parts return tracking•Bar Coding / RFID
•CMMS•MTTR analysis•MTBF analysis•KPI db query capability•PM schedule analysis•PdM schedule analysis
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Maximo Portfolio 2019
Source: IBM Maximo Conference Orlando – Aug 2019
Example
Inventory ManagementExpert Systems
Distribution Management
Key Performance IndicatorsDeliveryInventory ManagementUnit Sourcing Costs
Unscheduled Demand
Scheduled Demand
Suppliers
• Manufacture• Reutilize• Product Tear Down
Logistics Value Influence
Common Areas to Consider• Content Management• Substitutions• Category Management • Vendor Managed Inventory• Supplier SLAs• Supplier Warranty Redemption• Re-utilization Strategies
• Demand Management• Service specific forecasting
algorithms• Part Criticality• Inventory Effectiveness• (Multiple replenishment) Inventory
Policies• Automated replenishment plans• Inventory Surplus Management
• Emergency cycle times• Kitting• Vehicle / Remote
Inventory• Delivery strategies• Reverse Logistics• Exception
management• Multi-echelon
deployment
• Parts Availability• Parts Acquisition Time• Systems Availability• Distribution Quality• Parts Quality• Parts Costs• Inventory Turnover• Inventory Reserves
Limited systems scope to consider in Parts Management
12Adapted from IBM Parts Management Case Study – Don Barry
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Install Base
Failure History / MTBF
Operation Schedules
Repair BOMs / Kits
Asset Configuration
Asset Component Vitality
Network Echelon Optimization
Current Inventory
Vendor Source Dynamics
Local Overrides
Budget Constraints
Churn Control
Inventory Policy
Purchase Orders
Transfer Orders
Key Performance IndicatorsDeliveryInventory ManagementUnit Sourcing Costs
Logistics Value Influence
InventoryManagementValue
Parts Flow
Data Flow
Understanding the applied maintenance concepts will help leverage the utilization of asset configuration and component data, failure histories and install base into the setting of effective inventory policies
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Best Practices
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Example
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Slide: 15
Best Practices
Example
Materials Management Model
Procurement and Parts Repair
Procurement and Parts Repair
LogisticsLogistics
Inventory Planning / PolicyInventory Planning / Policy
KPIsKPIs
Simple model for Materials Management Optimization
16Adapted from Asset Management Excellence”, by John D Campbell & Andrew K S Jardine, Joel McGlynn
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Parts Management Strategy
• The value of our parts Inventory• How does our corporation drive value from our assets?
• How do our assets support those goals?
• How has operations and maintenance worked to optimize the asset value?
• How do we leverage inventory to support operations and maintenance?
• Who does our inventory serve?
• How is the inventory defined?
• How is success in inventory measured?
• How do we optimize the value of our inventory and support infrastructure?
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Maintenance Parts Management Excellence Pyramid
High level capabilities of a Maintenance Parts Management system from an EAM supplier
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General Capabilities Materials Management Purchasing Contract Management
• Reports and KPI management• Mobile technologies for order
picking, receipts and cycle
counting• Integration to:
• Financial systems• Maintenance systems• Asset (equipment)
ISP/RSP strategies by asset/location
• Vendor transportation systems
• Vendor consigned inventory systems
• Supplier systems• Warranty approval
systems
• Item Master, Service Items• Tools management• Inventory balance visibility
• Inventory transaction visibility• Costing method options (average, standard,
LIFO, FIFO)• Consignment inventory• Commodity groups and codes• Classifications. Specifications, Attributes• Network and Stock room location
management• Intercompany transfer • Reservation management• Kitting• Pick lists• Cycle counts• Inventory Policy Management• Minimum, Maximum, EOQ algorithms• Automated Replenishment• New Parts returns• Used Parts returns• Repairables / Rotables Management
• Purchase requisitions and Purchase Order management
• Order revision management
• Shipment Receiving• Invoice management• Request for Quote management• Supplier Master data management• Terms and conditions• Currency and exchange rate
management• Financial Chart of Accounts tracking• Cost management• Receipt tolerance
• Purchase contracts• Lease / Rental Contracts• Labor rate contracts
• Master contracts• Warranty contracts• Software contracts• Pay Rate management• Payment schedule
management• Service catalogs• Service groups• SLA Management• Service Incident Management
Source: IBM Maximo 2018
Example
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Basic Maintenance parts Inventory Management Systems will have the ability to:
• Display item number, description, related commodity data and attribute data;
• Quantities on‐hand, in transit, on order etc.;
• Location (stock room, bin and overflow locations);
• Supplier (vendor) options and dynamics for each item (and location if different);
• Lead time to fulfill a supplier order (Service Level Agreements – SLA data);
• Manage demand history by stock room and calculated average demand;
• Usage data (if different than Demand data);
• A ‘Where used’ or ‘equipment’ list that the item supports by location;
• Financial data including item cost, replenishment cost, item costing method;
• ABC Inventory cycle counts, variance history, and transaction history;
• ISP/RSP forecast levels by equipment (asset) type supported and by operating context;
• Inventory replenishment policy development and approval; and
• Some form of simple Analysis tool to manage data quality and report on costs, transactions service levels and internal analysis (i.e. Bin trip analysis).
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‘Hint’
Maintenance Parts Inventory System Reservation Types
• Inventory item reservations can come in three types, (Hard, Soft and Automatic):• Hard Reservation:
• Set by Inventory Planner;
• A requirement for a part by a specific date, usually tied to a work order;
• Requested balance is on‐hand.
• Soft Reservation:
• Set by Inventory Planner;
• A requirement for a part not a date specific, usually tied to a work order.
• Automatic Reservation:• Can be hard or soft reservations;
• Set by Maintenance Parts System based on selected criteria and run daily.
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Example
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System Stock location types
• Should be flexible enough to allow inventory to be accounted for and managed as:
• Vendor inventory / location
• Stock rooms in the enterprise
• Maintenance Technician locations such as a remote location or a service vehicle;
• Courier held inventories
• Holding locations for capital spares or kitted parts for planned work orders
• Inventory transfers between stock rooms should be available in the system to facilitate Transfer requests that may be automatically created as a result of a replenishment demand from a weekly calibration of inventory needs in a network location or manually created as needed (ad hoc).
• Leading Maintenance Parts Management systems will feature visibility to the key data elements of the Inventory Planning, Financial, Safety and Parts Transaction processes.
• Should be easy to navigate/use!
• Screen formats displaying:• Stock rooms (and locations);
• Inventory Item Master data (including commodity codes and condition codes);
• Tools data; and
• Inventory usage(disbursements), transfers and receiving data.
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‘Hint’
Inventory specific data should be easy to find
Examples:
• Item number and description;
• Storeroom and site location;
• Unit of measure (quantity of X or meter or volume);
• Expirations or shelf life dates (if applicable);
• Safety data (i.e. Hazardous part, special transportation instructions);
• Special item receiving instructions (i.e. inspection requirement or tolerance)
• Primary Stocking (Bin) location (and alternates if applicable);
• Type of part (rotating, tool, consumable, etc.);
• Key Financial data (i.e. applicable tax codes, item costing method, Standard cost, Weighted Average cost, Last receipt cost, FIFO, LIFO, etc.);
• Inventory adjustment histories (period to date, current balance, physical count);
• Inventory balance dynamics (Quantity on hand, Quantity in Transit, Quantity on Order, Quantity reserved for committed work orders, Quantity staged;
• Date last used, Date first added to system;
• Inventory policy tactic (Active, Date Protected, ISP/RSP protected, local over‐ride protected) and a netted policy inventory reorder level, Minimum stock level, Maximum stock level, and Economic Order Point;
• Condition code data could display as well – if applicable;
• Usage (Disbursement) history data could be displayed for past year and previous 2‐3 years if needed
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Example
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Managing Inventory (Item) transactions
• Can typically be:• Inventory issues;
• Inventory returns; or
• Inventory transfers (to another stock room).
• The transaction record should have an auditable trail data set that would include:• Transaction unique identifier;
• Item number, item description, quantity being disbursed
• Issue type (Issue to usage, transfer or return, etc.);
• Relevant stock room and location (to and from) data including work order number if applicable;
• Relevant Financial accounting (General Ledger codes, costing method) data;
• Non‐inventory (Asset) transactions can typically be:• Asset moves from one location to another (and an asset can include rotating repairable assets –if designated‐ that can be carried as an item in inventory).
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Example
Inventory Policy Management and Replenishment Algorithm Management
The data elements should be:• Whether the part is enabling automated replenishment to be calculated;• Inventory policy tactic (Active, Date Protected, ISP/RSP protected, local over‐ride
protected) and netted policy inventory reorder level, Minimum stock level, Maximum stock level, and Economic Order Quantity;
• Visibility to all quantity influences for a item (part) in a specific location (Quantity on‐hand, Quantity on‐order, Quantity in transit, Quantity in available for Repair, Quantity reserved or staged for work orders, etc.)
• Visibility to an item (parts) assembly hierarchy and/or direct substitution;• Monthly and Annual Inventory Planning by region and globally;• Network visibility and automated stock referral capability (with parts locator);• Scenario Simulations;• Unique demand and Seasonality considerations;• Repairable parts and Rotable Inventory Planning;• Multi‐Echelon;• Excess Re‐distribution;• Reporting & KPIs;• Source vendor (supplier) name, description and item name, number and
description in the vendor’s catalog;• Manufacturer vendor name, description and item name, number and description
in the vendor’s catalog; and• Algorithm sources for netting inventory policy, calculating new stocking support
levels and calculating replenishment transactions.
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The system should be able to hold or integrate to the source data for:• Demand Forecasting;• ISP/RSP netted settings by asset type (equipment supported) and location (see
Chapter on Asset Life‐cycle);• Optimizer settings by item and location (see Chapter of Asset Optimization
Management);• The data elements used to calculate a revised inventory policy each week or each
item by location (see Chapter on Inventory Policy Management); and• Automated Stock Replenishment.
Example
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Leading Practices to consider in Systems Requirements
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Inventory Tools and Services
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What I want from my Maintenance Parts Management tool• Manage Inventory
• Stock, Replenish, Procure, Transact, Report Balances
• Re‐Order, Receive, Purchase and manage Supply Vendors
• Manage Item commodity, repair, new, used, bins, lots, balances and supplier cost dynamics
• Create and manage an inventory policy for Highly active, Active and recommended spares (Insurance parts)
• Manage tools and/or consignment parts when required
• Manage multiple stock locations across the enterprise (Stockrooms, Vans, Satellite locations etc)
• Ease of use
• Manage Financial accounting of Inventory activity• WOs, Stock locations, Couriers, Hold locations, Staff locations
• Multiple currencies, Parts costing methods (FIFO, LIFO, Average, Standard)
• Perform a stratified sampling inventory verification method
• Account for direct purchase items to a WO
• Dynamically interact with maintenance activity• Manage Where Used, Rotables, Sub‐assemblies, Kits
• Support Asset, Preventive, Predictive, Repair and Turnaround Work Orders activities
• Reserve inventory items for key work orders (Hard/soft reservations)
• Provide a set of metrics to measure a high standard of service to the maintenance craft and organization
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‘Hint’
Asset Hierarchy Challenges
• Companies are always looking to see what they can improve, especially when it comes to asset‐intensive companies looking to improve their asset hierarchy. Aligning your Asset hierarchy with an international standard is considered the best practice.
• However, many asset intensive companies usually struggle with the task of organizing asset hierarchy data and can’t seem to align according to international standards.
• Root Cause:• No clear corporate standard
• Each campus has its own independent hierarchy
• Reliance on third party contractors or OEM vendors
• Leading systems • Will have the where used asset data for a specific item.
• This would be helpful when adding new Initial Spare Parts (ISP) supported parts and also becomes critical when an asset is at end‐of‐life so that surplus parts can be identified and disposed of in an equitable manner.
• Similarly, major part components will have parent / child relationships that should be acknowledged in a leading Maintenance Parts System
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ChildChildParent
Positive Placement
Compressor
Rotary
Screw
Lobe
Sliding Vane
Liquid Ring
Reciprocating
Piston
Labyrinth
Diaphragm
Example
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Commodity Code and Condition Code Considerations
• Many items in a stock room may have some commonality that could be helpful in working through transactions with:
• Companies (vendors);
• Purchasing;
• Tools;
• Service items; or
• Any item in the Item Master.
• Commodities will likely be grouped as either items, tools or services. Within these commodities, commodity codes will help to standardize:
• Different commodity sets;
• Commodity hierarchies across several levels.
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Example
Asset/Item Classification Codes
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Example Model: Standard of Transported Goods
Source: https://bhs.econ.census.gov/bhsphpext/brdsearch/scs_code.html
Standard Classification of Transported Goods (SCTG) Codes
• The SCTG employs a five‐digit numbering system, the structure of which is hierarchical. The hierarchy has four levels, each of which follows two important principles. First, each level covers the universe of transported goods. Second, the commodities in a given classification of a given level are mutually exclusive of those in any other classification of that level.
• Each individual product classification in the SCTG is based on building blocks provided by the Harmonized Commodity Description and Code System (HS) or the Standard Classification of Goods (the SCG, Canadas extension of the HS).
Source:https://www.bts.gov/archive/publications/commodity_flow_survey/hierarchical_features
Example
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Asset/Item Classification Codes
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Example Model: US Standard of Transported Goods
Source: https://www.doa.la.gov/osp/Vendorcenter/docs/unspsc_commoditycodes.pdf
• The United Nations Standard Products and Services Code (UNSPSC) is a taxonomy of products and services for use in eCommerce. It is a four‐level hierarchy coded as an eight‐digit number, with an optional fifth level adding two more digits.
• Version 16, released in 2014, contained over 50,000 commodities. The latest release of the code set is 19.0501 (as of July 2016).
• The UNSPSC competes with a number of other product and commodity coding schemes, including the European Union's Common Procurement Vocabulary, Germany's Eclass, and GS1's Global Product Classification.
Source: Wikipedia
Example
Managing Tools in a Maintenance Parts Management System
The tools system should have the ability to:• View tool availability;
• Manage tool status for the stock room;
• Issue tools;
• Manage tool balances;
• Make inventory adjustments (as needed);
• Perform vendor analysis and other related KPI metrics.
Stocked Tool Functionality Rotatable Tools Functionality
• Tools can be reserved to a specific work
order
• Tracks location of tool
• Resides in stock room until needed
• Issues to a work order (job)
• Returned at the completion of the work
order (job)
• Can be cycle counted as part of inventory
controls
• Managed like rotating assets
• Can reside in a stock room and therefore
issued and returned
• Maintenance plans can be created against
the rotating tool
• Calibration can be tracked against the
rotating tool
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Stocked versus Rotating Tools System Requirement Considerations
Example
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Inventory Integrity Management (Cycle Counting)
ABC N Cycle Count designations
• All items in a stock room to be counted at least once a year.
• ABC concept spreads the counting work load over the year.
• A Parts ‐ Higher extended value parts
• Counted more than 5 times a year
• Normally “Insurance” spares or high value/unique items
• Target counts every 30 days
• B Parts Medium extended value parts
• Counted 3 – 5 times a year
• Target counting every 60 days
• C Parts – Low extended value parts
• Counted less than 3 times a year
• Target once a quarter
• N Parts
• Do not count parts
• Not inventoried parts, extremely low value and high quantity parts
• System should be able to help you designate a Financial approved cycle counting tactic for ABC,N parts. Including confirming negative balance options. It should also be able to:
• auto create inventory adjustment transactions as part of the inventory variance reconciliation processes.
• Create variance report detail and summaries for approval from Finance as needed.
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Cycle counts should be completed so that every item in your inventory is counted at least several times in a given annual cycle.
‘Hint’
Inventory Management Item Costing Models
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Method
Current
Balance
Current
Item
Average
Cost
Initial
Inventory
Value
New
Item
Count
New
Purchase
Price
New
Purchase
Value
New
Total
Balance
New
Total
Item
Average
Cost
New
Extended
Cost for
Item
Item
Transaction
Quantity
Item
Transaction
Unit Cost
Item
Transaction
Extended Cost
Average Costing 5 $5 $25 10 $10.50 $105 15 $8.67 $130.00 4 $8.67 $34.67
Method
Current
Balance
Current
Item
Average
Cost
Initial
Inventory
Value
New
Item
Count
New
Purchase
Price
New
Purchase
Value
New
Total
Balance
New
Total
Item
Average
Cost
Item
Transaction
Quantity
Item
Transaction
Unit Cost
Item
Transaction
Extended Cost
FIFO 5 $5 $25 10 $10.50 $105 5 $5.00 $25 4 $5.00 $20.00
10 $10.50 $105 * Depends on the quantity ordered!
15 $ 130.00
Method
Current
Balance
Current
Item
Average
Cost
Initial
Inventory
Value
New
Item
Count
New
Purchase
Price
New
Purchase
Value
New
Total
Balance
New
Total
Item
Average
Cost
Item
Transaction
Quantity
Item
Transaction
Unit Cost
Item
Transaction
Extended Cost
LIFO 5 $5 $25 10 $10.50 $105 5 $5.00 $25 4 $10.50 $42.00
10 $10.50 $105 * Depends on the quantity ordered!
15 $ 130.00
Actual method used is directed by Corporate Finance
Inventory is 5 10 additional are received New balance of 15 Then 4 are disbursed
Example
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Working with New, Used and Repaired Commodities and Financial Treatment Models
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Method
Current
Balance
Current
Item
Average
Cost
Initial
Inventory
Value
New
Item
Count
New
Purchase
Item
Price
New
Purchase
Extended
Value
New
Total
Balance
New
Total
Item
Average
Cost
New
Extended
Cost for
Item
Item
Transaction
Quantity
Item
Transaction
Unit Cost
Item
Transaction
Extended Cost
Average Costing 5 $100 $500 10 $100.00 $1,000 15 $100.00 $1,500 4 $100.00 $400.00
Parts Repair
Process
Current
Balance
Current
Item
Average
Cost
Initial
Inventory
Value
Repaired
Item
Count
Repaired
Item
Value
Repaired
Extended
Value
New
Total
Balance
New
Total
Item
Average
Cost
New
Extended
Cost for
Item
Item
Transaction
Quantity
Item
Transaction
Unit Cost
Item
Transaction
Extended Cost
Current Inventory 5 $100 $500 15 $66.67 $1,000 4 $66.67 $266.67
New Repaired
Part 50% of New (Current Avg Cost) 10 $50.00 $500
Used Part
Returned as Good
Current
Balance
Current
Item
Average
Cost
Initial
Inventory
Value
Used
Return as
Good
Item
Count
Used
Return as
Good
Item
Value
Used
Return as
Good
Extended
Value
New
Total
Balance
New
Total
Item
Average
Cost
New
Extended
Cost for
Item
Item
Transaction
Quantity
Item
Transaction
Unit Cost
Item
Transaction
Extended Cost
Current Inventory 5 $100 $500 15 $50.00 $750 4 $50.00 $200.00
Used part as Good 25% of New (Current Avg Cost) 10 $25.00 $250
Inventory is 5 10 additional are received New balance of 15 Then 4 are disbursed
Example
Inventory Analytics ‐ Solutions
•Increase cash flow and reduce inventory costs by reducing inventory levels.•Increase revenue and the uptime of enterprise assets by predicting out‐of‐stock conditions.•Graphically displays inventory data to help users make faster, smarter and more effective decisions.•Offer immediate results that you can count on— no need for time‐consuming software configuration or data analysis.•Adjust recommendations to address inventory management priorities and objectives.
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A focus in Maintenance Parts Management can create:
• 100‐400%ROI within first year of deployment
• 15‐50% reduction in inventory
• 30‐50% reduction in stock out risk
• 15‐40% savings in maintenance budgets
• 20‐25% increase in supplier performance
‘Hint’
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What should a Leading Supply Chain Planning Solution include:
An SCP SOR should be able to support and integrate planning processes of:
• Demand planning, including collaborative demand planning
• Inventory planning, including collaborative inventory planning
• Replenishment planning, including collaborative replenishment planning
• Order planning/promising
• Production planning
• Manufacturing scheduling
37 Source – Gartner – Magic Quadrant for SCP SOR August 2018
SCP SOR provide key technical capabilities to ensure that the planning functionality can be utilized effectively across an enterprise supply chain:
• Process management
• Unified data, process and analytical models
• Scalability to handle large global planning models
• Performance management and analytics support
• Collaboration support
• Ability to deploy segmented SCP models
• Master data management (MDM)
• Integration to transaction systems
• Ability to propagate plan changes easily across an integrated planning model in a 24/7 environment
Example
Evolution of Maintenance Parts System Requirements
Some of the gaps recently addressed or being addressed are the ability to:
• handle used parts returns, parts repair processes and planning for ‘like new’ parts to be returned to stock in a pull order process;• do item related life‐cycle history tracking;• handle the accounting issues inherit in a work order or field service operation;• handle warranties for equipment and maintenance parts;• maintain a historical record of the demand and generate rolling average demand algorithms;• handle a ‘parent/child’ item relationships to a Bill of Material of specific asset as needed;• track Maintenance Technician orders and backorders through multiple tiers of inventory stock rooms;• manage lot‐sizing quantities in the system;• track “moving” inventory located in technician vehicles;• track “moving” inventory located at parts repair vendors;• track used/defective inventory located in a waiting for repair stock room; • manage a network of stock rooms with hierarchy echelon support parameters;• calculate weekly, a new inventory replenishment policy based on multiple parameters maintained in the system by stock room location;• generate daily and weekly replenishment orders based on multiple parameters; • leverage Blockchain to support order and item tracking audits;• create wave picking lists to optimize the end of day picking effort.
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Example
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Example of a simple Open Catalogues Interface (OCI) to a Maintenance Parts Procurement system
EAMBusinessObjects forPR and PO
EAMIntegration Framework
Firewall
Maintenance Parts or EAMApplication Server
Client Network Supplier Open Catalog Interface (OCI)
Supplier Sites
Web Service Interaction
HTTP Post of cXML document
Example
3 ways Blockchain will help Asset Management
1) It enables open collaboration
In addition to creating resiliency, blockchain fosters open collaboration across your networks. By creating a system comprised of the technology and processes of 3rd party services providers and even internal systems, you create a new collaborative set of partnerships and processes. These revolve around a “single source of truth” for the required asset management activities, as opposed to one app or platform. This open approach makes adding new partners and guiding their interactions easier, and its all done through transactions managed by the blockchain.
2) It creates asset and transaction transparency
Transactions performed on a blockchain are immutable – they cannot be changed or altered without permission from the network. This means that all the activities that have been performed on an asset are verified and create an accurate record for asset managers to use. They use these records to analyze performance, risks and to make strategic decisions about their equipment as part of their planning cycles. This also makes sharing data, like asset history, across multiple providers and partners, more fluid and flexible.
3) It enforces consistency
By managing the way data is collected and shared across partners, it ensures consistent and complete records. This ensures that throughout an assets life, there are no questions created by incomplete or missing data. The ‘block’ must be verified by participants, and creation of it requires completion of agreed‐upon rules. So if it is not in the blockchain, it never happened.
Example
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Gartner published a list of leading SCP System of Record‐providers ‐ Not MRO specific
• The supply chain planning (SCP) market was worth $4.215 billion in 2017
• is projected to grow at a five‐year compound annual growth rate (CAGR) of 7.9%
• The SCP market is made up of a large array of planning solutions that range from sales and operations planning (S&OP) to manufacturing scheduling and all points in between.
• The planning solutions span the spectrum of providing foundational planning capabilities through those enabling business differentiation and innovation.
• A significant component of the SCP market covers the various operational‐level demand and supply planning solutions, such as SCP systems of record (SORs)
41 Source – Gartner – Magic Quadrant for SCP SOR August 2018
Example
MRO Supply Chain Planning Vendors – Partial List
Other Potential Suppliers – listed by Gartner
• Adexa
• Anaplan
• Syncron
• Toolsgroup
• Manhattan Associates
42 Source – Gartner – Magic Quadrant for SCP SOR August 2018
Example
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Pa
rt C
ritic
alit
yLo
wH
igh C1 C2 C3
D1 D2 D3
M1 M2 M3
• Boards• Motors• Bearings
• Drives• Switches• Relays
• Seals• Shafts• Keyboards
• Monitors• Pistons• Sensors
• Gears• Assemblies• O-Rings
• Belts• Relays• Probes
• Plugs• Gauges• Kits
• Bolts• Couplings• Breakers
• Fuses• Washers• Frames
To leverage their maintenance approach, a maintenance parts organization can tailor their parts inventory policy using criticality and budget/space constraints criteria
Reliability HighLow
C = Critical
D = Disruptive
M = Maintenance
C = Critical
D = Disruptive
M = Maintenance
Asset Criticality Component Matrix
Management can tailor their parts inventory policy using criticality and budget / space constraints criteria
Value43
‘Hint’
Other Technical Solutions
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Maintenance Parts Management Pain Points
Supply Chain Pain
• High transportation costs
• Poor service levels to customers
• Low inventory turns
• High expediting costs
• High working capital
• High facility costs – labor or other
• Carbon footprint reduction requirements
• High end‐to‐end delivered costs
Inventory Planning Pains:
• High working capital
• Poor service levels to customers
• Low inventory turns
• High expediting costs
Production Planning/Detailed Scheduling Pains:
• Coordination of manufacturing of intermediate products and finished goods
• Manage increase in demand in capacity constraints plants
• High inventories and/or low service levels
• Building feasible plans is difficult and time consuming.
• Manage scheduling complexity
• Manage tanks, cleaning‐in‐place, sequence dependent changeovers and shelf life constraints
• Manage demand variability
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‘Hint’
Example Inventory Management Bolt ‐ ons
ILOG: Supply chain planning and scheduling capabilities that are complementary to ERPs
• ILOG LogicNet Plus (LNP)• Determine optimal number, location, territories, and size of warehouses, plants, and lines. Determine where
products should be made.
• ∙ ILOG Inventory Analyst (IA)• Determine push/pull locations, buffer locations, postponement, and policy analysis
• ∙ ILOG Product Flow Optimizer (PFO)• Determine best flow considering inventory, transportation, and mode
• ∙ ILOG Transportation Analyst (TA)• Strategic routing for fleet sizing, multistops, backhauls, and more.
• ∙ ILOG Plant PowerOps (PPO)• Planning and detailed finite scheduling for process manufacturing plants
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Example
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Tools to assess your Materials Management Opportunity
1. What do you spend each year (in millions) on enterprise capital assets (capital budget)?
2. What is the value (in millions) of the capacity supported by these assets and asset management?
3. What is the value (in millions) of your current Maintenance, Repair and Operations (MRO) annual spending?
4. What percentage of the MRO materials go into inventory?
5. What is the value of your current MRO inventory (in millions)?
6. What is the average annual inventory carry cost?
7. What percentage of the current MRO annual spending is strategically sourced each year?
8. What percentage savings is expected from strategically sourced purchases over regular purchases?
9. What percentage annual growth is expected in the MRO purchases and inventory per year (starting in year 2)?
10. What percentage of the MRO inventory is written down each year (example ‐ obsolete)?
11. What percentage of the total MRO inventory is lost due to shrinkage?
12. What is spent annually (in millions) on freight and shipping costs to expedite MRO part shipments?
Extracted from IBM/Aliean BVA Tool47
Example
Black Box Inventory Management Services
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MRO Supply Chain Planning Vendors – Partial List
SCM Strategy
Business Summary Base Loc
Approach to SC Assessment
Provides MRO Optimization Offerings
Organization ability to service (size etc.)
Comments
‐Provider of decision support services in the management of MRO inventories” Cda
Canada based with offices in US, Australia
‐Provides Intelligent MRO capabilities that are transforming the way Oil & Gas, Mining, Manufacturing and Utilities companies manage their capital‐intensive assets.”
USNewer acquired by IBM Services
‐“Innovative supply chain planning software company known for our comprehensive approach to supply chain management. Our solutions include: Demand planning, Demand forecasting, Inventory optimization, SI&OP, Replenishment optimization, with Enterprise licensing and SaaS deployment options.”
US
Leader in Gartner Report
‐“Leading supply chain provider powering today’s digital transformation. We help companies optimize delivery to customers by enabling them to predict and shape demand, fulfill faster and more intelligently, and improve customer experiences and loyalty.”
US
In Gartner magic quadrant and inherited capabilities from acquiring Manugistics (2006) and i2 Technologies (2010).
‐Leading provider of collaborative supply chain optimization and advanced retail planning solutions ” US
‐Enterprise Data Lifecycle Management™ (EDLM™), Master Data, Strategic Consulting, Analytics, Data Migration – Legacy Decommissioning, Enterprise Content Management (ECM), Data Services, data consolidation, Enterprise Asset Management (EAM), and big data”
US
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KeyLow High
Note‐ Partial list. There is no formal Gartner report for pure MRO SCP SOR Players
Example
Example Xtivity Solutions ‐ Offering Positioning 2009
Offerings Topical Solutions How sold
Insight Analysis Comprehensive MRO Analysis Optimization Business Case Investment Impacts Areas of Improvements Formal Summary Report Report Out Presentation Meeting
One Time Fee
Item Assessments Rationalization of non‐moving SKUs Provisioning Insight Item Breakdown Performance Characteristics Impact on Safety and Risks Supply Characteristics Criticality Assessment Qualification of Inventory Decisions
One Time Fee
Inventory Optimizer Ordering Values Recommendations MRO Investment Optimization Risk Assessment Cash Flow Impact Stock Out Risk Analysis Bad Actors Spotlight Interactive KPI Dashboard Line Item Drill Down Capacity
Subsctription
www.xtivity.com50
Example
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Example Xtivity Solutions – Offering positioning 2018
www.xtivity.com51
Inventory Assessment Inventory Optimizer
Item Master Assessment
Example
Maximo 7.X Inventory
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Maximo 7 Welcome / Sign On
53
Example
Maximo 7 Start Center
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Example
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Maximo 7 Module List ‐ or “Go To” Link
55 • The Inventory Module holds all of the Inventory related Applications
Example
Item Master
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Maximo 7 Item Master List Tab
All of the Maximo Applications open with a List view in order to facilitate a search or display a ‘list’ of the records required.57
Example
Maximo 7 Item Master List & Specifications Tab
An example of the List Tab with Records.
Notice the Items are underlined these are hyperlinks by clicking on the item Maximo will move to the Item tab and display the information for the selected item. 58
Example
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Inventory
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Maximo 7 Inventory Application
Inventory Application- Inventory – To enter, view, or modify item balances, costs, balances, bins and
lots, and to view storeroom locations where the item is stocked.
- Reorder Details – Used to enter, view, or modify reorder details, such as the reorder point, lead time, and issue units of an item. In addition, you can enter or view information about one or more vendors for an item, as well as information about multiple manufacturers or models for each vendor.
- Rotating Assets – If Item is Identified as Rotating on the Item Master provides a List of all Assets with the Item number selected
- Where used – List all assets where the item selected is listed as a subassembly or spare part.
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Example
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Maximo 7 Inventory Application
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Example
Maximo 7 Inventory Tab
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Example
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Maximo 7 Item Commodity Management
63
Example
Maximo 7 Organization Application to set up Financial controls
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Example
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Maximo 7 Cron Task Capabilities
65
Example
Issues and Transfers
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Maximo 7 Receipts and Transfers Tab
67
Example
Maximo 7 Issues and Transfers Issue Tab
68
Example
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Maximo 7 Adjustments Tab
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Example
Storerooms Application
Used to setup Storerooms
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Maximo 7 Storerooms Application List Tab
Use this Tab to configure Financial and other related information for the Storeroom.
The ‘Lists Tab’ lists all storerooms user is authorized to view
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Example
Using Mobile and RFID with Maximo
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• The Physical Count list screen will show a list of items that need to be counted
• Includes Item Number, Description, the Storeroom, the Bin where the count is to be conducted
• Sort by:
• Bin (default)
• Item Number
• ABC Type
• Barcode scanning for ease of counting
• Blind and Non‐blind counts
• Adhoc, recounts,
Physical Count application
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Example
Issues & Returns
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Issue & Returns app capabilities
• Issue items or tools to work orders from a
storeroom
• Connected only (significant implications of
transactions occurring in disconnected mode)
• Leverages Inventory Usage Documents
• View reservations on Work Orders or Assets
• Rotating Items
• Utilize barcode scanning
• Follows all Maximo inventory transaction rules
Example
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Slide: 75
Barcode and RFID Solutions in Maintenance Parts
Example
The Maximo‐RFID Solution Focuses on Asset Location
The ChallengeAssets move without notice and cannot be found. And assets move when they haven’t been calibrated, tested or certified.
The ResultWasted resources looking for lost / misplaced assets. Assets can move before being in an acceptable status.
The SolutionTrack assets using RFID and tie to asset management systems for optimal asset and asset management performance
RFID Asset Tracking
Maximo Asset Management
Where’s My Stuff?
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Example
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Slide: 77
Perspectives on Asset Management The Challenge – A Healthcare Example
“Hospitals misplace or lose 10‐20% of an estimated $750 million of their valuable medical
equipment annually, wasting staff and patient time and incurring costly replacement
charges.” (Frost & Sullivan)
“Equipment moving from patient to patient without decontamination has become a
significant issue in infection control” (JCAHO)
“We’re supposed to reach a 95% PM rate for JCAHO compliance. At the end of most
months, we’re at 90%... and we need to stop everything to search floor by floor, until we
reach 95%.” (Manager of Biomedical Engineering, Hospital in USA)
Example
Maximo‐RFID Solution Demo Overview
Asset Recognition RFID tagged assets Determines asset count Shows misplaced assets Allows location update Uses Maximo Mobile
Asset Location Update Asset movement from one
location to another Alert upon location change
- Illuminated light- Audible alarm
Automatic Maximo location update Uses RFID Premises Server
L1 & L2 = Light Sensors (to determine directionality)R = Passive RFID Reader and Antenna (in a portal structure)
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Example
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Maximo‐RFID Solution ‐ Industry Examples
• IT Asset Management (ITAM)
• RFID tracks high value IT assets like laptops, cartridge tapes, blade servers, etc.
• Provides greater control of inventory management
• Healthcare
• Track high value, critical assets on a hospital floor / within a location
• Infusion pumps, wheel chairs, ventilators, defibrillators, etc.
• Associate asset location/asset identity with asset status (sterilized, inspected, out‐of‐service, etc.)
• Energy and Utilities / Oil and Petroleum
• Inventory contents of rooms, substations, facility
• Next preventative maintenance performed while in locale
• Cross Industry
• Asset traceability and chain‐of‐custody
• Product recalls – locating affected assets
• Asset recognition
• Asset status (last preventive maintenance, calibration due, emergency status)
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Example
Summary• Asset tracking using RFID helps to answer the question of “Where’s my stuff?”
• A RFID solution integrated with Maximo solves a basic problem of accurate asset location• Target audience
• Installed Maximo clients (upgrade, services, and RFID opportunities)
• Installed RFID clients (Maximo opportunity)
• Greenfield applications (Maximo and RFID opportunities)
• Maximo‐RFID solutions• The Maximo‐RFID (passive) solution will be demonstrated in the Maximo Solution Center during Pulse 2009; otherwise at the IBM Global Solution Center in Coppell, TX
• An active tag RTLS (real time location system) healthcare demo integrated to Maximo is being demonstrated at the IBM Solutions Experience Lab in Austin, TX
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‘Hint’
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Manual TouchPoints
Real Time Data &Event Integration
Data Modeling& BusinessIntelligence
Enterprise VisualDecision Support
EnterpriseAutomated
Controls
Inn
oce
nce
Aw
aren
ess
Un
der
stan
din
gC
om
pet
ence
Exc
elle
nce
As
se
t M
an
ag
em
ent M
atu
rity
IT Support Commitment in Asset Management
Evolution of Asset Management (Art of the Possible)
Manual Maintenance Transaction Management
Preventive Maintenance and Asset Prioritization
EAM Systems, Transaction Mgmt, Parts Mgmt, Metrics and Financial Reporting
Automated Planning and Scheduling Systems
Manual Asset Investment Planning Efficiency
Risk and Reliability Analysis / Disciplines
Condition Based Monitoring Tactics
Automated Sensors and Expert Systems (IOT)
Automated Asset Performance & Asset Investment Management
Effectiveness
Predictive to Operations Prescriptive
Cognitive Insights
Predictive Asset Optimization
Supply Chain Optimization from Asset Management
Strategically OptimalPlanned to Predictive
81
Work & Asset Management
Asset OptimizationPrescriptive Asset Management
Prescriptive Operations Management
Integrated / Optimal SCM
‘Hint’
Asset Investment Planning
Data Dependencies in Asset Management
82
Workforce Performance Mgmt
Multi Business Dimensions VS Drivers KPI Mgmt
KPIs Dynamic Mgmt and Publishing cycles
Employee Satisfaction Metrics
Employee Time Tracking Measured
Contractor Tracking
Asset and Network Analysis
Asset Performance Monitoring
Asset Risk Mgmt
Repair vs Replace
Needs Assessment for O&M and Capital Planning
Regulatory Compliance Reporting
Worker Protection
Clearances Mgmt
Craft Training and Certificate Tracking
Regulatory KPIs
Corrective Action Program
Report / Manage Work
Execute Work
Approve Work
Permit Mgmt
Report Work
CA KPIs
Asset Performance Management
Asset Lifecycle Mgmt
Manage Assets
Acquire Assets
Monitor Assets
Design Assets
Retire and Dispose Assets
Asset Performance Mgmt
Asset Condition Assessment
Asset History, FMEA triggers
Asset Performance Tracking
Asset Performance Recommendations
PHA (RCM, HazOPs,) Policy and Programs
Asset Investment Planning
Needs Assessment for O&M and Capital Planning
Investment Planning for Capital Projects & Budget
Asset Performance Analysis
Maintaining Investment Portfolio
Asset Risk Mgmt
Manage Risk Assessment
Asset Criticality
PHA (RCM, HazOPs,) Monitor
Established Risk Matrix Mgmt by Asset
Workforce Performance Mgmt
Asset Mgmt Strategy
Maintain Material Strategies & Policies
Maintain Regulatory Compliance & Safety
Work Order Policy
Asset Technical Information Mgmt
MEL Management
Classification, Specifications & Failure
Codes
Repairable Assets
Asset/Equipment Detail
GIS Location Reference
Where Used' Parts data
Asset Maintenance Strategy
PHA (RCM, HazOPs,) Policy and Programs
Proactive (PM/PdM) Maintenance Tracking
Corrective Maintenance Tracking
Asset Specific KPI
RCFA Programs and Data Mgmt
IoT StrategiesManage Asset Master Data
RCFA Programs and Data Mgmt
IoT Strategies
Strategy Decision Engine
Asset Risk Mgmt
Repair vs Replace Asset Specfic KPIs
Design / Engineering Standards
History
Asset Specific KPIs
Asset Management
Environment, Health and Safety
EH&S Incident Tracking
EH&S Training and Tracking
EH&S KPIs
Capital Projects and Program Mgmt
Initiate Project
Plan Projects
Schedule Projects
Execute Projects
Leveraging IoT and Cognitive Predictive Tools
Work Forecasting and Resource Planning
Initiate and Manage Work
Identify Work
Planning Work / Manage Maintenance Plans
Work and Resource Schedule Operations
Work Design and Engineering
Compatible Unit Estimating
Location GIS Alignment
Engineering Design Change Request
Engineering Design Change / Approval
Work Mgmt Strategy
Assets and History tracked in System (EAM/GIS)
Leading Practice KPIs (i.e. % Planned, % Sched Compliance) reached
Centralized Planning Mgmt
Backlog Mgmt
Mobile Work Mgmt
Field Work Order Mobile Dispatching
Electronic Maintenance Documents leveraged
Mobile Time entry, asset updates and new WOs
managed
Mobile Technical Documents Access
EAM, Doc Mgmt and GIS data available through
Mobile EH&S Reporting and
tracking available through Mobile
Manage Project Master Data
Perform Project Reporting
Execute Work
Close Work
Warehouse Mgmtactivities available through
MobileManage Work Reporting
Perform Maintenance, Reliability & Root Cause
Analysis
Manage Shutdowns
Outage Management Overview Process
Engineering Design
Procurement Engineering Change
Work Management
Equipment Content
Manage Assets
BoMs
Item Data
Risk and Failure Data
Equipment Source Options
Item Master
Item Descriptions
Where Used data
Commodity Codes
Item Categories & Attributes
Repair Financial metrics and contribution to
savings
Inventory Policy
ISP/RSP Lists and echelons
Echelon Requirements
Data Support Criteria
Min/Max, EOQ Dynamic algorithms
Transaction History
Transaction history
Usage trends alerts
New / Used Parts ReturnMgmt
Financial Reporting ofdisbursements and usage
Repairable Parts Mgmt
Repairable Parts Lists
Inventory Policy demand forecasts
Repairable capture versus process rates
Repair Tracking and Quality metrics
Parts Procurement
Supplier Lists
Supplier Relationship Mgmt
Supplier basket cost comparisons
Order / receipt process automation oversight
RFI/RFP Facilitation
New parts setup in systemsISP/RSP Echelons
Source Dynamic data
Warranty, Return & Repair Strategies
Update History
Inventory Effectiveness
Optimizer Data and Policy
Design / Engineering Standards
History
Inventory Policy by stock location
Maintenance Parts Management
Data Governance
Data Governance
Data Security
Data Stewardship
Data Architecture, Analysis and Design
Data Quality MgmtStrategy
Data Quality and Cleansing
Data Quality Assurance / Validation
Document Management
Records Management
Master Data Framework
Manage Asset Master Data
Manage Asset data alignment (GIS/EAM)
Data Conversion / Integration
Information Lifecycle Mgmt
Data Back‐up
Data Archiving Strategy
Data Archiving Execution
Information Security and Privacy
Data Privacy
Data Access
Data Security
Data Erase
Data Governance
Data Challenges• Getting the data elements right• Understanding the interrelated data dependencies• Confirming the source and quality of the data• Getting comfortable that decisions can be made from data insights• Building the process execution into the system to automate process triggers, alerts and steps• Driving value for the data dynamics
Data Challenges• Getting the data elements right• Understanding the interrelated data dependencies• Confirming the source and quality of the data• Getting comfortable that decisions can be made from data insights• Building the process execution into the system to automate process triggers, alerts and steps• Driving value for the data dynamics
Exam
ple ‘data sets’ in Asset M
gmt
‘Hint’
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Reference: Partial list of Potential Parts related data sets
83
Equipment Content
Manage Assets
BoMs
Item Data
Risk and Failure Data
Equipment Source Options
Item Master
Item Descriptions
Where Used data
Commodity Codes
Item Categories & Attributes
Repair Financial metrics and contribution to
savings
Inventory Policy
ISP/RSP Lists and echelons
Echelon Requirements
Data Support Criteria
Min/Max, EOQ Dynamic algorithms
Transaction History
Transaction history
Usage trends alerts
New / Used Parts ReturnMgmt
Financial Reporting ofdisbursements and usage
Repairable Parts Mgmt
Repairable Parts Lists
Inventory Policy demand forecasts
Repairable capture versus process rates
Repair Tracking and Quality metrics
Parts Procurement
Supplier Lists
Supplier Relationship Mgmt
Supplier basket cost comparisons
Order / receipt process automation oversight
RFI/RFP Facilitation
New parts setup in systemsISP/RSP Echelons
Source Dynamic data
Warranty, Return & Repair Strategies
Update History
Inventory Effectiveness
Optimizer Data and Policy
Design / Engineering Standards
History
Inventory Policy by stock location
Maintenance Parts Management
Source: Client example
‘Hint’
Data Automation for Inventory Planning
ActionDecision
Data
Analytics
A part is out of stock for a critical requirement
‘Descriptive’What happened?
Human Input and Analysis
Adopted graphic from Gregory M. Baird, Linkedin
What other conditions can help to predict need and execute a mitigation with available dynamic data?
Out of Stock or not stocked?
A part is out of stock for a critical requirement‘Diagnostic’Why did it happened?
‘Predictive’What will happen and when?
Conditions that precede this critical demand known and predictable?
Is data available to predict demand and prescribe a mitigating stock policy?
‘Prescriptive’What mitigation should I do?
‘Decision Support’
Can we automate the prediction and execute a mitigation with available dynamic data?
‘Decision Automation’‘Prescriptive’What mitigation should I do?
Can we automate the prediction and execute a mitigation with available dynamic data?‘AI / Cognitive’Generating new questions, supporting greater inputs and managing more hypotheses
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Example
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Inventory ManagementExpert Systems
Distribution Management
Key Performance IndicatorsDeliveryInventory ManagementUnit Sourcing Costs
Unscheduled Demand
Scheduled Demand
Suppliers
• Manufacture• Reutilize• Product Tear Down
Logistics Value Influence
Common Areas to Consider• Content Management• Substitutions• Category Management • Vendor Managed Inventory• Supplier SLAs• Supplier Warranty Redemption• Re-utilization Strategies
• Demand Management• Service specific forecasting
algorithms• Part Criticality• Inventory Effectiveness• (Multiple replenishment) Inventory
Policies• Automated replenishment plans• Inventory Surplus Management
• Emergency cycle times• Kitting• Vehicle / Remote
Inventory• Delivery strategies• Reverse Logistics• Exception
management• Multi-echelon
deployment
• Parts Availability• Parts Acquisition Time• Systems Availability• Distribution Quality• Parts Quality• Parts Costs• Inventory Turnover• Inventory Reserves
Systems and Tools can help to manage the many elements of the Maintenance Parts Value Chain
85Adapted from IBM Parts Management Case Study – Don Barry
Maintenance Parts Excellence Model Map
86
Asset Life‐cycle Model
Materials Management Model
Strategy
Operational(Primary Processes)
Functional
Asset Performance
KPI ModelMaintenance Parts Excellence Model
Inventory Policy
Initial Spare Parts / Recommended Spare Parts
Parts Replenishment
Highly Active Parts (Min/Max/EOQ)
Date Activity (Birth, last used)
Substitution Order Points
Dynamic Inventory Optimizer
Parts Network support
Parts Usage / Returns
Scrap Mgmt
Surplus Mgmt
Inventory Stocking Inputs Inventory Stocking Outputs
Found Parts, Commissioning surplus
Inventory Policy Model
Maintenance Parts
Excellence
Planning and Execution
Operations
Maintenance
Vendor
ProcurementDesign
Engineering
Finance
IT, Legal, HR
MPE Stakeholders Model
Logistics / Warehousing
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Case Study
87
• With so many areas of Maintenance parts management to consider…
• What should we work on first?
Strategy Exercise
• KPIs
• Logistics Management
• Procure and Repair
• Asset Life‐cycle Integration (ISPs)
• BPR
• Strategy
• Management / Organization
• Inventory Planning
• Systems (Information Technology)
• Inventory Optimization
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Potential Initiatives for Case Study
• Logistics Management• …
• ….
• ….
• Procure and Repair• …
• ….
• ….
• Strategy• …
• ….
• ….
• Management / Organization• …
• ….
• ….
89
• Inventory Planning• …
• ….
• ….
• Systems (Information Technology)• …
• ….
• ….
• Inventory Optimization• …
• ….
• ….
• Asset Life‐cycle Mgmt• …
• ….
• ….
Questions?
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