Integration Concerns
Many
of the benefits from enterprise asset management (EAM) software result
from the ability to exchange data from other systems and subsystems. These interfaces
are not trivial in design or construction. For example, one of the simpler interfaces
involves inventory. Namely, EAM software needs access to inventory to determine
the availability of repair parts, whereas your manufacturing system needs access
to inventory to dispense ingredients or bills of material (BOM). Typically,
EAM software will have its repository of inventory consisting of repair parts.
On the other hand, a manufacturing ERP system will have its repository of inventory,
which can accommodate ingredients, BOM, and repair parts. Designers of manufacturing
systems are not that short-sighted to think that every company has computerized
maintenance management systems (CMMS) or EAM software.
Some basic questions include
- Where
is the official inventory maintained?
- How
do you keep the inventories in sync?
- What
flares will go off when they go out of sync?
- How
do you put them back in sync?
However,
in the software development world, these are difficult questions to answer and
design for; moreover these are just the tip of the interface iceberg. The table
below lists some of the potential EAM interfaces.
Granted
some of these may be overkill, but, even if only half are needed or desired,
the interface issues and construction represent a major commitment of time and
resources, now and in the future. The good news is that if you can satisfy all
of your software needs from a single source, which can be done through IFS and
Intentia, your interfaces are most likely already resolved for you*. Again,
this is a strong selling point for IFS and Intentia.
However,
while most companies recognize the value of EAM software, many have not even
taken the first step. These companies, of necessity, already have existing systems
to control their inventory, payables, manufacturing, payroll, and other functions
and, due to time and monetary considerations, are not likely to give to them
up for new, fully integrated software. The bottom line? Companies selecting
a new ERP system should include a review of the EAM functions in each product,
particularly in process and asset intensive industries where good EAM is frequently
seen as being critical to the business. However in most cases, companies will
acquire EAM software but the interfaces to external systems will have to be
constructed.
When
providing a stand-alone solution, vendors may oversimplify the interface issues
by suggesting the availability API's (application programming interfaces)
or software-based integration services. They may also pressure you into buying
more modules than you need. These statements may have validity. However, in
the case of interfaces, it may be wise to be the "Doubting Thomas as you move
to Missouri, the show me'" state: this is clearly a case where you must do
your homework beforehand and not solely rely on the claims of the provider.
Request references from clients who have actually created interfaces; determine
the time and effort required; check the cost of any customization to meet your
specific needs as a so-called "standard" interface rarely meets these; and verify
that there are no degradation of performance on either side of the interface—existing
and EAM software.
This
is Part Two of a four-part note.
Part
One defined EAM and CMMS.
Parts
Three and Four will present an analysis of two major vendors.
*In
this note offerings from software vendors IFS AB (XSSE: IFS)
and Intentia (XSSE: INT B), two fellow Swedish providers of
enterprise business applications for mid-size and large enterprises, are used
to help illustrate some of the advanced features of EAM.
What Would ERP Vendors Do?
Prior
to, during, and shortly after the Y2K phenomenon, enterprise resource planning
(ERP) software vendors had plenty of sales and implementation work. ERP systems
are suites that typically support most business functions inherent within an
enterprise, and because ERP providers may tailor their solutions to meet the
needs of various industries, ERP packages may also vary in their functional
scope and supported modules. Namely, certain vendors focus on service-based
(i.e. people-centric rather than physical products-centric) industries, others'
solutions are geared towards retail distributors, while the manufacturing-oriented
vendors support material management, production planning, scheduling, and execution.
Many vendors tackle multiple areas though, both above-mentioned and beyond.
Still,
given plant maintenance is a core business component of many manufacturing enterprises,
one would expect ERP products to at least feature native CMMS functionality.
Thus, it might not be too dazzling a fact that IFS and Intentia (as well as
SAP, Oracle, Ramco Systems,
and former J.D. Edwards now PeopleSoft) have
been offering maintenance modules for years. Well, not quite, given most ERP
vendors have deliberately stayed away from addressing the needs of the maintenance
departments, which had created the opportunity for CMMS/EAM specialists.
Nonetheless,
ERP vendors have lately been scrambling to provide maintenance and asset management
for various reasons, such as the bolstered competitiveness through an enlarged
functional footprint and existing customers' or prospects' inquiries and demands.
Furthermore, now that they are chumming for additional sales, these entrant
vendors are facing the same interface issues when attempting to incorporate
an EAM solution with existing software functionality. Consequently, it is not
surprising that typical ERP software has not traditionally excelled in the EAM
or CMMS arena. Of late, the landscape is starting to change with more ERP vendors,
either reluctantly or not, beginning to challenge the standalone EAM solutions.
At least, major vendors of EAM/CMMS software face strong head-to-head competition
from several suppliers of ERP software that natively offer maintenance modules,
bundled into the larger ERP or supply chain management (SCM) context.
The
contest here is classic, and dj vu, in SCM and CRM arenas —the user will have
to chose between standalone best-of-breed (BOB) software and a fully
integrated module that often lacks some of the "bells and whistles" featured
in a BOB offering (see Best
of Breed Versus Fully Integrated Software: The Pro's and Con's) . Also,
since pure play EAM vendors do not rely on existing ERP modules to support certain
maintenance operations, their more complete functionality may provide a better
fit with how certain maintenance departments operate than with internally developed
EAM solutions by ERP vendors. Also, as the EAM software has been evolving into
a mature, slower-growth market, many incumbent vendors are responding to this
by offering high-margin, value-added services, such as helping to install, integrate,
maintain, and even host the software, which has already been purchased by many
of the major customers in asset-intensive industrial sectors.
Given
slower projected growth and competition from ERP vendors, major vendors of stand-alone
EAM or CMMS packages such as Datastream Systems, Indus,
Avexus, Mincom, MRO Software,
and PSDI have been reengineering their product suites around
the Web and enhancing their global capabilities. Additionally, they have been
adding capabilities such as e-commerce, fleet management, facility and property
management (stretching beyond production facilities to offshore drilling platforms,
fleet, IT equipment like local- and wide-area networks, computers, mobile devices,
and even point-of-sale terminals), often by partnering with specialized players
to be more competitive in various niches. They are targeting large existing
customers in process industries (petrochemical and oil refiners as well as mining
and metals processing) and hybrid sectors as prime candidates for their value-added
services. However, the major challenge of these vendors is to win increased
acceptance among discrete manufacturers that have not readily purchased this
increasingly proven productivity tool in the past, and which has been ERP vendors'
more fertile area.
Reliability-Centered Maintenance
Going
back to the EAM/CMMS comparison, reliability-centered maintenance (RCM)
is the critical differentiator between a CMMS and EAM software. RCM is a process
for defining a cost-effective schedule for each asset necessary to maintain
reliable performance. In order to establish this schedule, reasonable expectations
of performance, limitations, and priorities must be established for the physical
asset. Instead of focusing on preventing an asset from failing, RCM concentrates
on ensuring on its continued reliability. It shifts the maintenance paradigm
from one of prevention to one of prediction so that appropriate action can be
taken early on. Furthermore, creating a RCM environment is not a one-time process.
Rather, it is a continuous, evolving, and ever-improving process of analysis.
Both IFS and Intentia's EAM offering provide the bio-feedback process. Through its cost and statistical data, Intentia's EAM analyzes failure patterns, determines the consequences of these failures, suggests alternative maintenance programs, analyzes the cost of maintenance programs versus the cost of failure, and activates the selected program upon approval. This multi-step analysis can be repeated at the discretion of the user or when conditions, namely repeated failures, warrant it.
Similarly through its equipment metering, monitoring and performance modules, IFS' RCM functionality is enabled through data collection from automated systems and criticality analyses. IFS' approach is that, through continuous investigation and examination, the right jobs are done at the right time, ensuring proactive asset management, minimal waste of time, and ongoing asset reliability.
This
concludes Part Two of a four-part note.
Part
One defined EAM and CMMS.
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. |
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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. |
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