Transcript Slide 1

Engage to Empower: A QAD Strategy for
Reducing Enterprise Costs
QAD EAM (Enterprise Asset Management)
Steve Pitsos,
Director, EAM Product Management
Engage to Empower
Manufacturing Company’s Challenges
 Companies are driven to find ways to:
– Increase production output
– Improve product quality
– Reduce cost
 Plant Operations is responsible for a company’s
most critical assets, its production equipment.
Reliable equipment will:
– Maximize production performance
– Minimize scrap / rework
– Lower cost
• Costs 4X more to repair broken equipment than to
maintain it
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How QAD EAM Supports Manufacturing
 QAD EAM is responsible for the management of the
manufacturing assets including;
– The design, construction and commissioning
– Operations and maintenance (preventive and repairs)
– Capital replacement / upgrade of equipment
Asset Lifecycle Management
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Maximum Utilization at Lowest Cost
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Goal of Asset Lifecycle Management
Uptime Analysis / Breakdowns
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Failure Analysis / Production Impact
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Cost Analysis / Capital Forecasting
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Extending the Value of Your QAD Investment
Most companies simply ‘check-the-box’ if they
have a CMMS/EAM solution in-house
– The tool satisfies a compliance requirement
• Sarbanes-Oxley (Finance & Accounting Controls)
• CFR 21 Part 11 (Life Sciences)
• TS (Automotive)
• Customer Tooling (demonstrated care of their
assets through audits)
• ISO (customer driven PM program)
• OSHA (Risk Management)
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Extending the Value of Your QAD Investment
 Does your company have an EAM strategy?
– If production asset reliability and availability is vital to your
business, you need an asset care strategy!
• 350,000 manufacturing facilities in the US
• MRO spend in the United States is nearly $150B
• 40% of this is reactive and unplanned (if a company is reactive,
so will your spend be)
– If sustainability is vital and important to your business, you need an
asset care strategy!
• Commercial energy cost is nearly $400B
– 38% Manufacturing / 32% Transportation / 30% Buildings
The success of an asset-intensive company, and ultimately the bottom line, is dependent
on the effectiveness of it’s maintenance strategy.
KnowledgeStorm – Sept 2007
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Extending the Value of Your QAD Investment
 Leading companies are implementing EAM strategies for:
– Implementing Production Asset Reliability as a competitive
advantage
– Comprehensive alignment and management of MRO inventories
across the enterprise
– Reduction in MRO spending across the enterprise to improve cash
flow and bottom line performance
– Introduction of sustainability into the manufacturing process to:
• drive energy costs down
• reduce carbon emissions
• replace hazardous production chemicals with ‘green’ chemicals
It’s an Attitude: “Asset Care” versus “Asset Repair”
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How We Do It
Plant Operations
How do you do it now?
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Business Challenges
The current economic downturn requires asset intensive industries to
get the maximum value out of the company’s existing assets.
Aberdeen Group, November 2008
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Engage to Empower
Business Challenges
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Project Controls (Accounting)
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No visibility to what projects will actually costs verses budget
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Reports are maintained through spreadsheets, which are labor intensive,
time-consuming, out-of-date and inaccurate
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Inability to control spending
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Plant Maintenance
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90% of maintenance activities are fixing broken equipment
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Repair maintenance cost 4X more than planned maintenance
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Only 50% Overall Equipment Effectiveness (OEE)
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MRO
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30% of MRO inventory is obsolete
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25% of purchases are incorrect or unnecessary
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Expensive spare parts cannot be shared between plants
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QAD Solution - EAM
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Project Controls (Accounting)
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Budget spending control
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Project work breakdown structure
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Tracks internal and external expenditures
Production Assets and Facility Maintenance
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Schedules preventive and predictive maintenance
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Tracks internal and external costs associated with repairs
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Integrates production into the maintenance process
MRO
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Electronic requisitions workflow tied to department budget
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Automatic stock replenishment based on stocking levels and demand
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Track slow moving and obsolete inventory
Engage to Empower
Enterprise Asset Management
QAD EAM & QAD
ERP Compared
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ERP Manufacturing Components
MRP / Material
Releases
Production
Planning
Bill-of-Material
Planning
Production
Work Order
Bill-of-materials
Operator Instructions
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Machine & Labor
Scheduling
Finished
Goods
Cost tracked
to:
Components
Finish Goods
COGS
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EAM Maintenance & Tooling Components
Stock
Replenishment
Maintenance
Planning
Bill-of-Material
Planning
Maintenance/
Tooling
Work Order
Bill-of-materials
Operator Instructions
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Machine & Labor
Scheduling
Work Order
Complete /
Release to
Production
Cost tracked
To:
Asset or Tool
for Lifecycle
Analysis
Engage to Empower
EAM Seeks Granular Visibility
Maintenance, Engineering & Tooling Performance
Capital Project Budget Against Spend Performance
Leveraged Purchasing Performance
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Enterprise Asset Management
Value & Benefits
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EAM Value & Benefits to Your Company
 Value: Consistent equipment reliability and streamlined
operations processes ensure production can meet sales
requirements at all times.
 Benefits:
– Increase revenues
• Capital Projects: Well-run projects come in on time
and on budget, so revenue objectives can be met
• Plant Maintenance: Reduced equipment downtime
increases production yield
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EAM Value & Benefits to Your Company
 Benefits:
– Improve margins
• Plant Maintenance: Efficient equipment reduces
scrap and rework lowering the cost of goods sold
– Lower Costs
• Plant Maintenance: Improved maintenance
planning results in lower repair costs and longer
equipment life
• MRO Inventory & Purchasing: Well-managed MRO
supply chain means purchasing-related costs
decrease & inventory levels are right-sized
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Enterprise Asset Management
QAD EAM .Net
Product
The Next Frontier:
March 2009 Early Adopter Release (v12)
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Solution Review: QAD EAM
Integrating Project
Engineering, Plant
Maintenance and
MRO into single
solution
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Engage to Empower
Solution Review: QAD EAM
Scheduling PM’s
based on actual
production results
in more reliable
equipment
EAM reports on
the effectiveness
of each PM
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Engage to Empower
Solution Review: QAD EAM
Reduce inventory
through EAM’s
consignment
capabilities
• Track inventory stock outs
• Identify and eliminate slow moving
inventory
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Solution Review: QAD EAM
• Control spending through
electronic approval
• Visibility into current budget data
• Approval via PDA
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Enterprise Asset Management
Conclusion & Final
Thoughts
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Conclusion and Final Thoughts
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Review your company’s Asset Reliability Strategy and set a new course for
cost reduction and asset performance improvement initiatives
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Maintenance & Tooling
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MRO / Indirect Purchasing
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MRO / Indirect Inventory
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Project Accounting (CapEx and OpEx)
Align ERP and EAM initiatives with a common focus on production
operations
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Make asset reliability a factor in production planning, scheduling, and execution
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Development common communication channels between production,
maintenance & engineering departments
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Leverage standardization of maintenance practices, inventory management and
purchasing
Engage to Empower
Conclusion and Final Thoughts
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Your Mission & Challenge: ‘Asset Care’ versus ‘Asset Repair’ Strategy
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It a Choice! Are you in the business of caring for your production assets or simply
repairing your assets when they fail?
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Empower yourself to take the next important steps in developing an EAM strategy
within your organization as a competitive advantage
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Empower your organization to execute with success!
In Your Role, you are the Commander of your company ship!
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During revenue growth periods, an EAM tool is a weapon for increasing capacity
and gross profit margins
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During business downturn periods, an EAM solution is a weapon for cost
containment, managing & controlling spend & improving operating cash flow
Engage to Empower
Enterprise Asset Management
Questions
Steve Pitsos, Director
– QAD EAM Product Management
• Email: [email protected]
• Phone: 678-463-0759
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