Enterprise Asset ManagementMark GibbisonSAP UK Industry PrincipalLocal Government, Health and Higher Education

Workshop Outline• What are you dealing with• Effective Asset Management• Potential for Cost Savings• Typical Pain Points• Enterprise Asset Management• Drivers and Benefits

What are you dealing with• Local authorities in Scotland control land,

property, plant and equipment worth an estimated £18 billion

• Constitutes the second highest cost on revenue budgets after employee expenses

• Improvement in the strategic and operational management of capital assets could have a real impact on financial resources

• Efficiencies and options for reinvestment

Enterprise Asset Management Pain PointsTypical Pain Points Key Observations

Capital Expenditure

Disconnected systems not linking critical data between design and purchasing costs

Lack of software tools that would reduce design time and validate proper equipment selection

Lack of data. Not knowing what the life of equipment is and therefore full project life cycle costs

Asset Value/Condition

Incomplete Asset Registers Unknown Value of Assets Unknown condition of assets Limited visibility of depreciation

Operating Expenditure

Lack of visibility of operation data including maintenance costs

Not able to accurately determining whether to repair, refurbish or replace equipment

Enterprise Asset Management Pain Points (Continued)

Typical Pain Points

Key Observations

Asset Utilisation

Lack of timely and accurate preventative maintenance data

Poor, inadequate planning and scheduling data of personnel and maintenance activities

Health, Safety and Environmental (HS&E) Performance

Lack of consistency and data transparency across the company

Lack of data auditability Lack of central data source for health and

safety Lack of integration with employee, HR,

data

Inspection and Calibration Asset Condition Monitoring Mobile Inspection Project Management Redeployment/Disposal Alignment with Business

Strategy

Full Enterprise Asset Management Core Financials Financial Optimisation Capital Investment

Planning

Human Resources Time and Payroll Skills Management

Computerized Maintenance Management Systems

Enterprise Asset Management . . . An Evolution

Asset Registers Asset ValuationsAsset Maintenance Schedules Procurement and Inventory

Enterprise Looks at more than one plant, but is flexible enough to accommodate

local variations Uses standard business practices and KPI's

Asset Focuses on assets and optimization, not just on maintenance Optimizes equipment lifecycle decisions

Management Balances performance, risk, and cost to achieve maintenance excellence Looks at maintenance in a business context to drive company profits

Enterprise Asset Management

EAM – Potential for Cost Savings

Total maintenance spend is over $2 trillion

Approximately one third of the total maintenance spend is unnecessary

Maintenance workers spend fewer than 4 hours per day performing hands-on work

Downtime costs from lost production outweigh direct maintenance costs by a ratio of 4:1

Maintenance costs have risen 10-15% per year for the past 25 years

NecessaryWasted

Maintenance CostEscalation in the US Key Observations

Source: “Benchmarking Best Practices in Maintenance Management,” Terry Wireman, 2004

0

200

400

600

800

1000

1200

1400

1600

1800

2000

20001979USD in Billions

1990

Asset Management Activity Tracking

Source: Aberdeen Research, Enterprise Asset Management Benchmarking Report, 2003

% o

f res

pond

ents

….organisations are not thoroughly tracking some of their most important maintenance activities, leaving significant untapped opportunity to save operating costs….

Deprec

iation plan

ning

Facilit

y utili

zatio

n

Mainten

ance

planning

Ad hoc ass

et

mainten

ance

Spare part

s

manag

emen

t

Fleet a

ssignmen

t

Component

config

uration

65.5%

EAM – Potential for Cost Savings

0

10

20

30

40

50

60

70

53.6% 49.6% 45.2% 35.3% 26.6% 26.2%

Enterprise Asset Management Business Drivers

Increase asset productivity and speed up repair cycles

Drive continuous improvement through Analytics

Improve visibility and control over expenditures

Enterprise Asset Management . . .

A complex business process

MRO Procurement & Inventory

Asset Maintenance

Financial Optimization & Reliability Reporting

Inspection & Calibration

Human Resources

RFID and Mobile Devices

Asset Health Monitoring

MaterialsRequirements

PlanningProject

Management

Core Financials

EAM – A Complex Business Process

Enterprise Asset Management is a complex operation involving multiple processes, departments, and business partners…

MRO Procurement & Inventory

Asset Maintenance

Financial Optimization & Reliability

Reporting

Inspection & Calibration

Human Resources

RFID and Mobile Devices

Asset Health Monitoring

MaterialsRequirements

PlanningProject

Management

Core Financials

EAM – A Complex Business Process

…… requires a complete business solution for all the important facets of your Enterprise Asset Management operations…...

Middleware

EAM – A Complex Business Process

Middleware

…middleware technology and Enterprise Services Architecture provide an open integration, application, and composition platform . . .

3rd PartySystems

Legacy Systems

EnterpriseSystems

Middleware

3rd Party

Systems

Legacy Systems

EnterpriseSystems

EAM – A Complex Business Process

. . . enabling the only completely integrated, end-to-

end Enterprise Asset Management solution.

Design & Specify Business planning Investment management Collaborative specification

and design Maintenance engineering Interfacing CAD systems Project management Maintenance cost planning

An EAM should Support . . .

Procure & Build Supplier qualification and

candidate selection Bidding and contract

management Procurement process Document management Project management Collaborative construction Project and investment

controlling

An EAM should Support . . .

Operate & Maintain Asset Register Financial Integration Preventive and predictive

maintenance Maintenance planning and

scheduling Work order management Mobile asset management

and RFID Contractor management MRO and services procurement Work clearance management Shutdown planning Interfacing GIS and SCADA

An EAM should Support . . .

Decommission & Dispose Asset transfer and disposal Collaborative disposal

management Document management Project management Waste management Asset compliance Asset re-marketing

An EAM should Support . . .

..and Give You the Ability to . . .

Collaborate Design collaboration Collaborative project management Business partner web portals

Analyze Integrated asset accounting Asset and maintenance reporting Damage analysis Spend and supplier performance

analytics Budget tracking

Optimize Asset performance management Maintenance cost planning Reliability-centered maintenance Predictive condition monitoring Operator dashboards Underpin Corporate Business

Strategy

MRO Procurement & Inventory

Asset Maintenance

Financial Optimization & Reliability Reporting

Inspection & Calibration

Human Resources

RFID and Mobile

DevicesAsset Health Monitoring

MaterialsRequirements

PlanningProject

Management

Core Financials

Middleware

OpenIntegration,Application,

andComposition

Platform

A Complete Enterprise Asset Management Solution

3rd PartySystems

Legacy Systems

EnterpriseSystems

Complete Solution Covers all aspects of an asset’s complete lifecycle, including the needs of the maintenance organization…and much more

Scalable Solution Supports local plant views while covering the enterprise’s entire

asset portfolio

Corporate Solution Enables common business practices across the enterprise,

with the ability to perform global inventory checks

Adaptive Solution Adapts with your business, fueling growth and empowering

improved maintenance and reliability

Enterprise Asset Management Differentiators

An Adaptive Business Network

PLAN

EXECUTE

…enables planning and execution of an optimal enterprise asset management strategy . . .

. . . at the same time empowering you to sense and respond to changes in your business strategy, creating an adaptive and responsive business network.

An Adaptive Business NetworkPLAN

SENSE EXECUTE

RESPOND

ADAPT

Integrated Enterprise Asset Management – Paybacks

Tangible Benefits

Increased planned maintenance 78%

Source: “Benchmarking Best Practices in Maintenance Management,” Terry Wireman, 2004

Reduced emergency work 31%

Reduction on excess inventory 29%

Improved asset availability 17%

Increased maintenance productivity 29%

Average improvement

Summary• Asset Management is a Corporate issue• Best addressed by an Enterprise

Solution• Asset Management Strategy underpins

Business and Financial Strategies• 0.1% Saving on £18billion bottom line

…….?

Enterprise Asset ManagementMark GibbisonSAP UK Industry PrincipalLocal Government, Health and Higher Education