EAM – Anyone for Mining “Hidden” Dollars?

Surely you’re thinking, “How can dollars be ‘hidden’ in enterprise asset management (EAM) systems, waiting to be mined or uncovered?”

Indeed, there are vast treasure troves of value waiting to be mined and liberated in EAM systems! In order to access these untapped veins of ore in your company’s EAM implementation you’ll need to know the best practices to apply.

EAM systems are used by companies in capital-intensive sectors, such as oil and gas, utilities, and transportation, for a variety of purposes, such as:

• Tracking capital equipment and assets in far-flung areas in their global operations
• Managing preventive maintenance schedules and requirements of expensive assets
• Monitoring and logging emissions from equipment for regulatory reporting and compliance
• Managing spare parts inventories that themselves can be capital items on a balance sheet

Each item of capital equipment has many data attributes that need to be accurately collected, updated, and maintained within a company’s EAM system.

Data can be as basic as a manufacturer’s name, equipment model, and serial number, or as detailed as the bill of materials for that item, maintenance schedules and diagrams, spare parts inventory requirements, and everything else that is worth tracking over the equipment’s lifecycle.

Starting from data collection, there are many ways in which equipment data can be of poor quality, whether by omission of key elements, or by inconsistent and incomplete data entry into legacy databases. Sometimes the omissions are due to the very simple fact that when complex equipment is procured, its constituent parts are not all called out comprehensively.

At other times, such as when one company acquires another, diverse sources of equipment data, in very different formats, need to be merged into one database.

Not having accurate or complete equipment data can lead to a lot of headaches, such as unexpected equipment downtime due to missed maintenance, or spare parts not being at hand to recover from a malfunction. A single event of this type can costs tens of millions of dollars in lost revenue alone.

Preventing problems resulting from poor data quality in EAM systems thus becomes a critical step in mining the hidden dollars that are otherwise squandered away in completely avoidable operational crises.

Recently a project that I was actively involved with was able to mine hidden dollars with EAM utilizing data quality in order to maximize returns. This method allowed the large petrochemical company to avoid a large cost and was able to mine one million hidden dollars for the company. So what are you waiting for? Put your miners’ hat on and let’s get that treasure!

Herb Hadley, Director, Solutions Development - Global EAM Practice Lead, Utopia, Inc.

EAM: Equipment Data Collection – What and Why

A recent customer discussion reminded me that even the guys who have been in database management and/or equipment maintenance for decades may need a refresher on what equipment data is important and why. The perceived requirements for equipment data collection typically vary from “we only need the basics” to “give us all the information we could possibly need – just in case we need it.” Both ends of this spectrum of opinion can be correct . . . but not at the same time!

The “just give me the basics” guys will probably get less information than will be needed to accurately identify a specific equipment. The “give me everything” guys will probably generate more information than their EAM software system allows them to enter. Likewise, some of the “everything” equipment information may be of little value to the maintenance department.

So how should a manager decide what equipment information to include in the EAM system?

In future blog entries, I’ll discuss the how equipment criticality, spares strategy, development of bills of materials (BOMs), purchasing and inventory management all affect this process . . . but for now let’s look at some basics.

The What and Why of Data Collection

Equipment Class: needed to set up maintenance strategies and cost centers. Also important in setting up equipment hierarchies and functional locations.

Equipment Description: provides a standard way to describe what you plan to maintain. Establishing noun/modifier and taxonomy are part of this process.

Unique Identifier: a RFID or barcode number allows the maintenance group to find and maintain specific equipment, allocate the costs associated with that specific equipment and track the location/status of that specific equipment – in operation, in repair, in inventory, etc.

Manufacturer: needed for cost of ownership/maintenance tracking

Model: needed to build BOMs and track costs

Serial Number: another unique identifier that ties the specific equipment to a purchase order and/or installation date. Use of the serial number as the sole unique identifier is problematic since reading the equipment name plate may be more difficult than reading a bar code or RFID.

Date of Manufacture: important for establishing warranty claims, especially if the date of installation is in doubt

Do you need all this information? Probably. Do you need to collect more equipment information? Maybe. The decision on what data to collect should be made based on how you expect to use the information.

Herb Hadley, Director of Solutions Consulting, Utopia, Inc.

What’s Next After You Get the Customer Right?

In our efforts to identify unique customers, so we can target and cross-sell, we ultimately come to the next big step in the retail information supply chain: product data. Then of course, right after product data is vendor data. To excel at direct marketing you need to have cleansed and consolidated customer data, such as names, titles, addresses, and other contact info. But what about the product or service you are offering?

If you are an on-line cataloger or large manufacturer of a large retail product line you know that matching the right product to the right customer can be just as challenging as matching one customer to another across disparate data sources. The challenge is compounded when the manufacturer has five separate but similar product lines, like sporting goods lines, eye glass frame brands, or consumer electronics. Added to the compounding is product portfolio rationalization after a merger and acquisition. Simply said, your marketing department may have a good handle on a single view of the customer in the CRM system, but your view of product data across the disparate ERP and catalog systems is a mess.

Typically at this point the focus of the data management effort shifts from customer to product, and then in an effort to reconcile competing, opposing, or seemingly similar products, vendor data is added to the equation. Vendor data, depending on the business, can range from name and address of the supplier to chemicals used in production process and parts used in the component assembly. The data cleansing and consolidation operation has now decidedly shifted from attributes about human beings to attributes about products such as color, size, features, variants, classes, categories, prices, etc.

Because optimizing the retail information supply chain can be daunting, SAP and Utopia have decided to offer a Webinar on September 7 that delves into how to manage and cleanse the data in this chain. Join us in learning about the issues and techniques in solving this challenge, specifically:

• Key retail-industry trends and opportunities
• How consolidating product and vendor data is key to success in retailing
• How to overcome obstacles in data quality to enable data governance

We’ll be able to cover much more ground than in this blog post, and carry the discussion to the next step.

Find further information on the Webinar here.

Frank Dravis, Marketing Leader, Utopia, Inc.

Data – It Can Make You or Break You

Data is crucial to run a business. Analyzing the business data and taking the appropriate actions accordingly are key elements to better business practices. A friend of mine had a very lucrative digital printing and computer business where he used to repair/troubleshoot customer computers and had a big digital printing plant. The business was running well, but the main problem was he never preserved or archived the sales data and never bothered to look or analyze it. He didn’t realize the importance of archiving data, tracking trends e.g. best selling services, where the weaknesses laid, which products or services needed to be reconsidered or discontinued in order to increase profitability. A few years later he was at a point where he thought he might be losing his business but he never dared to look at the data and analyze it. His hunch was that the overall costs of goods were going over the overall sales.

For example…

Sales
	Items	Total Sales
	Laptop Repair	$220.00
COG
	Labor	Parts	Others	Total
	$100.00	$120.00	$50.00	$270.00
Revenue
	($50.00)

On one instance, he lost $50 for one laptop repair. This one instance lead to a number of repeatable instances which never were realized until later on when one day he was unable to buy materials to run his business because there was no money in the bank.

But since he never looked at the sales data, he couldn’t control this reoccurring troublesome trend brewing without his knowledge. In the end he had no money to pay the rent and his bank had a negative balance. To run a business, data is very important and he realized that right after he had lost the business.

To run any kind of business, everyone should have a good understanding of the sales data, so he/she can gain more control on the overall business. Then they would not hesitate to make the right decision because they would have the right information at hand. Due to my friends lack of knowledge regarding his businesses operational data hindered his ability to stay in business. There always is a proper way to handle data and slice and dice it correctly to suit your business needs. Being naive towards enterprise data can make our lives miserable.

Afm Rahman, Data Migration Consultant, Utopia, Inc.

Data Can Add 20% to a Plant’s Value

A recent conversation with a venture capitalist brought home the financial benefits of having accurate and complete asset information. We discussed various ways to value asset-intensive businesses like refineries, power plants, and manufacturing facilities. Obvious valuation measurements include operational productivity, cash flow and a comparison with similar plants’ sales price. Two additional methods that caught my attention were asset (equipment) value and projected maintenance cost.

“Not having an accurate list of equipment, the equipment’s condition and an accurate history of maintenance cost typically causes me to discount the value of a plant by at least 20%,” stated the investor. “Lack of this information increases the risk of the transaction. Seller’s claims can only be taken seriously when those claims are documented in the maintenance software (SAP, Maximo, etc.).”

Buying or selling a plant doesn’t happen very often. Justifying a plant’s maintenance and IT budgets happen at least once per year! Use the “adds 20% to the value of the plant” comment the next time you have to justify the cost of cleansing your historical data or upgrading your (enterprise asset management) maintenance software.

Steps you can take now:

1. Perform a “Data Health Assessment™” to determine your data’s completeness, consistency, conformity and number of duplicates.
2. Check the accuracy of your spend reports. Are incomplete or confusing Bill of Materials causing costs to fall into too few accounting “buckets?”
3. Each piece of equipment you maintain should have a unique identifying number imprinted on a bar code label, RFID, or metal tag that is attached to the asset.

This number should be consistent with the identifying number in the maintenance software (SAP, Maximo, etc.).

At minimum; define your critical equipment and make sure the equipment information is correct and complete. Be consistent. Develop and maintain an equipment classification methodology and taxonomy.

Herb Hadley, Director of Solutions Consulting, Utopia, Inc.

HANA/BI and Data: Teaming to Manage in Real-Time

Do you know HANA (High-performance ANalytic Appliance)? HANA-enabled BI (Business Intelligence) can deliver hundreds of billions of records of data literally in an instant, even remotely; hence enabling real-time business decisions (action) and thus helping businesses run more effectively. Still, this requires a human and the machine (software, applications, networks, infrastructure, computers, databases and the HANA/BI), a 2-system system, for optimal performance.

Immediately, what comes to mind are millions or nerve endings in a biological system (a human being) sending electrical impulses through a network of nerves, to a central neural network processing unit (the brain), instantaneously, where mission-critical decisions are made in real-time for survival.

Driving a car, your eyes sense the road ahead, your ears hear a loud horn, your senses are heightened as your brain tenses the muscles in your arms and legs poised to take evasive action, and in the blink of an eye you hit the brakes to avoid a child who just ran into the roadway.

The car computer senses these inputs and the Automatic Braking System (ABS) springs into action to provide you the shortest possible stopping distance with control over direction. This is a 2-system system, the human and the vehicle, working together to provide transport and safety – survival!

If the nerve pathways, senses, signals and neural processing unit had bad data (didn’t see the child, didn’t hear the sound) or had incorrect perceptions (again bad data, out-of-date signals too slow, etc.) then the appropriate and proper response (braking and steering) would not have happened at the right time, and someone would have been hurt – no survival.

Similarly, in business, when the right amount of response (appropriate) is executed in the right direction (steering) at the right time, then the business continues. Successive correct intelligence in business practically assures survival.

If any of that is wrong, it could mean disaster – missed shipping deadlines, stock-outs, missed marketing opportunities, missed vendor payments, missed collections … all contributing to lower ratios and poor stock performance – survival of the CEO? Survival of employee security? Survival of shareholders?

So the sensors create data. Other data models the real world so the onboard car computer knows what to do – that could be wrong too, or become corrupted. The infrastructure propagates the data and signals to a processing unit which aggregates all the signals and data into a picture, or a status of what’s happening in real-time, so business can be managed with appropriate and proper responses.

How does all of this depend on the quality, correctness, completeness, continuity, conformity, currency (timeliness) and construction of the underlying data in the system? How does the configuration of the data affect performance? It depends on many factors related to your particular business and industry. So how do you figure that out?

I’ll let you think about it. Here are a few clues…define, build, maintain, and govern HANA/BI data, a.k.a. your enterprise data. Until next time!

David Kuketz, Solutions Consultant, Utopia, Inc.

Data Consultant: Do you have the aptitude and attitude?

Reflecting on my first blog post, “Data Consultant Etiquette - What’s Your Attitude?,” the situation presented in that scenario taught me that one can have lots of technical capabilities and can be rich in aptitude but without a proper attitude a person will gain nothing. I think it is important as a data consultant to have the appropriate balance of aptitude and attitude.

ATTITUDE can be described as:

1. How we communicate with the customers
2. Our overall behavior is also key part of attitude, like if you are working on-site with a customer your overall etiquette and ethics matter a lot.

The second characteristic is APTITUDE which has an equal importance in terms of customer relationship management from the business perspective.

Companies are hiring some pretty extraordinary professionals who have wonderful aptitude skills. These people devise innovative ideas which provide valid and refined approaches to solve client problems.

Having the right mixture of attitude and aptitude in turn makes our customers happy and satisfied which obviously at the end of the day will contribute to a company’s overall business success and retaining clients.

As you know in this crazy business world client’s must be treated a royalty. Remember the phrase “the customer is always right.” Their needs need to be satisfied with your wonderful and effective services and perfect solutions.

This all leads to the development of better relationships with new and old customers, and a number of benefits such as…

• increased sales due past relationships and how you treated the customer
• the ability to understand your customer and their environment more effectively
• increased ability to cross-sell due to customer’s increased trust in you

Your attitude and aptitude highly affect the success of not only the project you’re deployed on, but also the company you work for. As you mature into a seasoned professional remember to work on your mix aptitude and attitude to get the right balance.

Shwetesh Deepak, Data Migration Consultant, Utopia, Inc.