Do More With Less: Three Sure-Fire Strategies for Manufacturers – Fixed Assets

Yesterday I talked a bit about the project I’m working on that will help manufacturing orgs “do more with less”. I outlined three specific areas where I believe organizations can direct their attention to realize cost savings and improved operating margins.

Today I’m going to talk about Fixed Assets.

Within manufacturing organizations, it’s a struggle to continually monitor the location, condition, and status of tangible infrastructure items, like physical property and equipment assets, used in the manufacturing process. In complex facilities, the volume of fixed assets number in the thousands, and each item requires proper tracking and maintenance. Often, the lack of information about fixed assets causes considerable problems that compound over time, bringing about unplanned down-time and unexpected costs. Asset management is often regarded as the responsibility of the maintenance department, but the responsibility extends well beyond maintenance to safety, environmental, and facility management functions. Consider, for a moment, the information required about a fixed asset to effectively operate a piece of equipment. The following list details the information required for every asset:

• Equipment data sheet
• Asset Hierarchy Master or Register
• Fixed Asset Tag number
• Maintenance information and records
• Reliability information
• Maintenance activity lists or job routines
• Consolidated Bills of Material
• Standard Operating Procedures (SOP)’s and safety procedures
• Training manuals
• Update drawings
• Management of Change (MOC)
  

With the continued pressure to run facilities more effectively—with fewer safety related incidents, operational failures, and resources—companies are feeling challenged by the expectations of increasing production turns and higher quality products. Asset Information Management (AIM) has become a strategic tool for asset-intensive organizations. AIM improves decision-making capabilities related to operational planning (production and maintenance) and execution. Organizations that have adopted an AIM strategy are also able to gain competitive advantage when it comes to addressing efficiencies and without it, the ability to manage change, deal with emergencies, or make informed decisions is significantly diminished.

Yet many disconnections still exist between the various pieces of a fixed asset’s information. Quite often, this information is siloed in multiple, unrelated systems, causing duplication, errors, and omissions; costly mistakes that frequently go unnoticed.

Consider the following as an example. Asset information is maintained solely by Purchasing and Maintenance, but every department relies on their own version of the information. When Purchasing makes a decision about buying spare parts it is entirely possible that they will continue to purchase components for a previously decommissioned asset. This seemingly inconceivable problem is a very real issue that becomes costly when repeated over a number of assets and for an extended time.

Operational Readiness
The road to operational readiness is complex. The importance of building a solid AIM strategy upfront can’t be understated. Leveraging AIM as a foundational element of this strategy will help ensure effective operation of the facility and will minimize overall lifecycle costs. It is critical to set expectations for standards, structure, and workflow upfront to gain buy-in from engineering, design, and construction groups. It is also imperative to lay out expectations about the type of data to be collected, and when and how it will be passed off, to ensure that engineering, safety, and maintenance specifications are met. This information provides the critical insight and intelligence needed to establish operational readiness on the shop floor.

Adopting AIM is a collaborative process that requires individuals and groups to freely share the tools and information that are used to complete tasks and achieve departmental goals. Asset Management personnel need the flexibility to conduct routines that ensure equipment is optimized, maintained, and operationally effective. When the inherent value of equipment is maintained, and access to information about those assets permitted, disparate data is amalgamated across the enterprise. Predictive maintenance programs, the capture of critical information on an ongoing basis, and the establishment of best practices become achievable tasks. But in order to make this happen, information traditionally kept in a maintenance system should connect to the organization’s Enterprise Content Management (ECM) system by utilizing individual assets as common bonds. Consequently, when anyone needs to find the information required to maintain an asset, or to make a decision about that asset, all the information is centrally available and highly accurate.

Manufacturing organizations can deduce tremendous value and cost savings when optimizing asset information from multiple sources in one, central repository. A solid asset management strategy can lead to organizational gain in terms of reduced operational risk, reduced financial risk, increased workforce productivity, ease and speed of access to critical, decision-making information, decreased wrench time, and decreased equipment downtime. Therefore, an effective asset management strategy enables an organization to manage and function collaboratively in an efficient and intelligent manner.

Next week, I’ll discuss the second part to this which is dealing with the administrative framework.