Mining and industrial plants are increasingly realising massive bottom line benefits by integrating the maintenance and production software of processing plants into a centralised financial package.
This is according to Bo Hagler, Enterprise Asset Management (EAM) product director at QAD, a provider of enterprise applications for manufacturing companies.
According to Hagler, the days of having separate silos or an enterprise asset management package operating in isolation are long gone. Integration has become the new mantra, particularly for companies wishing to optimise their business production levels while reducing operating costs.
He says one of the biggest challenges facing production plants is how to ensure as much production capacity as possible, while reducing the maintenance costs of running the machinery. This includes holding only as much repair inventory as is absolutely necessary to reduce storage costs and cut out inventory and ordering duplication.
Many industrial and mining houses often sit with as much as 30 percent extra inventory and parts that are either not required or obsolete, yet this challenge can be overcome with an effective ordering and routing system.
“QAD clients have reduced their inventory costs by as much as 25% and save millions of rands a year by implementing effective maintenance, routing and ordering systems,” he adds.
One of the biggest savings with effective asset management software can be seen in equipment maintenance, as it drastically reduces machinery breakdowns and increases production capacity.
Hagler refers to an example of a client in the manufacturing industry that was spending between 80-90 percent of technician time fixing machinery and ‘putting out fires’. The client installed QAD’s EAM software and combined it with an asset management strategy; which included operator-based maintenance, Root Cause Analysis (RCA) and a Preventative Maintenance plan.
This resulted in a machine running capacity improvement of 10%, while reducing equipment breakdown by 66%. Programmes, such as RCA, help to pinpoint causes of breakdowns to ensure that preventative maintenance routines can be designed to prevent similar breakdowns from occurring in the future.
This implementation of QAD’s EAM software also meant the plant could produce more and meant capacity was increased without the company having to build additional plants or production/processing lines.
“This implementation has contributed to their bottom line, to the magnitude of millions of rands annually.”
Hagler says QAD EAM’s ability to support the company’s asset management strategy and associated programmes was key to achieving heightened output, improving equipment reliability while drastically reducing MRO levels.
Pointing to an automotive analogy, Hagler says regularly changing your car’s oil is cheaper and more effective than running the engine into the ground and then having to outlay for a new engine. The same logic applies to industrial plants, where a consistent, preventative maintenance strategy keeps production lines running smoothly, boosting profit and reducing machinery downtime.
“The buy-in and commitment of a top management is vital for an enterprise asset management strategy to succeed. This needs to be measured with Key Performance Indicators (KPI) and carefully integrated across the organisation – integrating maintenance and production with financials all in one ‘cradle to grave’ EAM software package. This consistent management commitment remains key for production success across the industry,” concludes Hagler.
Hagler will be visiting South Africa in mid-August 2008 to discuss the benefits of Enterprise Asset Management for local businesses. He will be hosting public presentations in Johannesburg on 11 and 12 August, Durban on 13 August and Port Elizabeth on 14 August.