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

Introduction

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

• Scheduling preventive maintenance based on triggers (such as hours of operation) or timed events (for example, every three months)
  
  
• Ensuring probability-based availability repair and spare parts
  
  
• Serial number tracking and tracing
  
  
• Suggesting and originating the purchase of needed repair parts
  
  
• Warranty tracking
  
  
• Ensuring availability of manpower resources with required skills and training
  
  
• Maintaining an asset registry and repair parts database (i.e. nomenclature, hierarchy structure, where used, support descriptions, etc.)
  
  
• Tracking costs of maintaining individual pieces of equipment
  
  
• Differentiation and appropriate management of fixed, mobile, and continuous assets
  
  
• Recording unexpected events for further analysis
  
  
• Statistical analysis of equipment performance and reliability, and providing a variety of reports from static and dynamic sources (i.e. equipment utilization, equipment downtime, MTBF—equipment mean time between failure, MTTR—equipment mean time to repair, etc.)

EAM software encompasses these functions and, in most cases, extends their capabilities but EAM software offers many features that can provide additional capabilities, value added functionality, and savings to your company. As seen above, a CMMS solution usually includes purchasing and procurement, inventory management, as well as equipment, parts, and asset tracking. However, CMMS applications typically do not have financial and accounting (other than mere cost recording) or human resource (HR) management capabilities (other than basic staffing needs recognition) and are typically purchased to integrate with the applications that support financial and HR management more deeply. These back-office applications are also typically designed to run at and for a single plant.

The CMMS functionality is thus typically extended to EAM by the addition of financial management modules, and more advanced HR management to cater for roster creation and management, and for recording and monitoring necessary skills. Technically, the EAM applications are also designed to scale to larger numbers of users and facilitate running at multiple sites from a single central database, thereby catering better to entire enterprises, rather than departmental or individual plant needs.

To that end, both IFS and Intentia's EAM offerings can schedule preventive maintenance and manage these activities as well as unplanned maintenance. However, these products seamlessly extract and update data from Microsoft Project workplans, a popular project management tool. Additionally, Intentia's EAM is integrated with Movex Advanced Production Planner (APP), its production optimization tool. As a result, production orders and maintenance work orders for the same production line can be planned simultaneously, thus providing the possibility of scheduling maintenance work into available production windows. Moreover, the product is designed to plan production work around any maintenance issues, so that production is optimized.

EAM Offers More

EAM software offers a more robust methodology for documenting equipment and their parts to include warranties, schematics, and computer aided design (CAD) drawings. Through IFS's Plant Design set of modules, once data is entered into the common database, it immediately becomes available to the other IFS modules. As a result, information can be recycled, remain consistent, and updated, and never has to be entered twice. Plant Design also provides designers with a drawing tool for process and instrumentation design. Predefined forms and convenient lookup functionality are further examples of features that benefit all design disciplines.

EAM software provides better and more conclusive analysis of the maintenance, repair, and, overhaul (MRO) alternatives. The Intentia Diagnostics module, which is used to provide RCM functionality, calculates the cost of failure based on the downtime costs multiplied by the downtime plus any additional repair. It also provides an additional analysis, namely cost prevention, which is based on the cost of the maintenance service, including labor and parts, over the same period of time as the mean time between failures (MTBF).

What does it mean to your company to have the resource available, based on historical trends and a preventive maintenance schedule? Or more simply stated: is it costing the user more to maintain the resource than the value it is providing? On the other hand, through an interface with its fixed assets module, IFS provides an interesting wrinkle to the overhaul alternative. Its EAM offering will consider undertaking a major overhaul, say of an engine replacement, if this activity results in a significant extension of the useful life of the asset to generate sufficient depreciation expense to warrant the overhaul.

Both of IFS and Intentia's EAM offerings provide excellent tools by which to customize access to the software. This customization includes screen views, database queries, and report layouts. Personal portals cover the most common functions and features required by maintenance technicians. The end result is an easier assimilation and use of the software and can smooth the learning curve. As will be discussed later in this article, a major differentiator of EAM software is the reliability-centered maintenance (RCM) concept, which is supported by both IFS and Intentia.

With input from Daryl Mather's recent TEC article entitled, The Total EAM Vision Strategic Advantages in Asset Management, the chart below summarizes features and functions expected in CMMS and EAM software.

This concludes 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.

About the Authors

Predrag Jakovljevic is a research director with Technology Evaluation Centers, Inc. (TEC), with a focus on the enterprise applications market. He has over fifteen years of manufacturing industry experience, including several years as a power user of IT/ERP, as well as being a consultant/implementer and market analyst. He holds a bachelor's degree in mechanical engineering from the University of Belgrade, Yugoslavia, and he has also been certified in production and inventory management (CPIM) and in integrated resources management (CIRM) by APICS.

Joseph J. Strub has extensive experience as a manager and senior consultant in planning and executing ERP projects for manufacturing and distribution systems for large to medium-size companies in the retail, food and beverage, chemical, and CPG process industries. Additionally, Strub was a consultant and Information Systems Auditor with PricewaterhouseCoopers and an applications development and support manager for Fortune 100 companies. He can be reached at JoeStrub@writecompanyplus.com.