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The essential role of the supply chain in asset & work management operations

If an organization wants to increase asset and work management efficiencies and carry out true enterprise asset management, the supply chain cannot be an afterthought.

Current literature provides ample justification for investing in a computerized maintenance management system (CMMS). Asset management has been identified as a critical success factor in asset-intensive operations, and the push to adopt the ISO 55000 standard is an additional impetus for companies to consider implementing or replacing their CMMS software. But in all the focus on increasing asset and work management efficiencies, supply chain processes remain largely absent from the conversation.

Typically, it’s assumed that the CMMS will interface with whatever supply chain system is in place, or a project may be launched to identify a separate supply chain solution that will connect to the selected CMMS package. But if an organization wants to carry out true enterprise asset management, the supply chain cannot be an afterthought.

The Gartner Group defines an enterprise asset management (EAM) system as “[an] asset register, work order management, inventory and procurement functions in an integrated business software package”.* ABB has a long history of working with asset-intensive operations, from utilities to mines to transportation providers, and if there is one essential observation we can make from this experience, it’s this: Timely availability of parts and other supplies (consumables, tools) is as vital to performing jobs in the field as the workforce itself. No operation can properly function without either. Native integration of supply chain functionality with maintenance and operations functionality facilitates the timely and consistent exchange of information across these areas, which is extremely beneficial to the overall effectiveness and efficiency of any asset-intensive enterprise

Let’s take a look at some common supply chain functions that receive input from, and are regularly used by, the maintenance and operations personnel, and how ABB Ability™ Ellipse®, ABB’s fully-integrated EAM system, supports those requirements.

Materials master catalog

> Contains all stock items and related information, including item descriptions, part numbers, manufacturers and vendors, classifications for item management, etc.

Ellipse EAM facilitates standardization and accuracy by providing the ability to create description templates by type of material. This ensures that items are cataloged consistently and with all necessary descriptive data. Unlimited manufacturer part numbers can be associated to each stock code, avoiding unnecessary item duplications and providing useful sourcing alternatives. These features facilitate item searches and requisitioning from anywhere in the maintenance function that materials are required, including projects, work orders, standard jobs and application parts lists (aka bills of material or BOMs). The impact on productivity for maintenance users is hard to overstate.

The ability to link stock items to their corresponding equipment is another essential capability. Search functions, item identification, stock planning and disposal become much easier when items are associated to the equipment that uses them.

Inventory management

> Provides necessary parts and supplies availability to the operation while maintaining stock levels that optimize use of working capital.

Ellipse EAM’s extensive inventory management capabilities include 19 reorder algorithms, total integration with maintenance planning, options to automate replenishment actions when appropriate, and anticipation of potential stock-out situations. These capabilities are optimized by the fact that they are instantaneously updated from maintenance transactions, thus responding to the actual needs of the operation, rather than transferring them to a separate supply system that was not developed with the same purpose of design and structure.

Procurement

> Manages the commercial aspects of parts and materials acquisitions to ensure the necessary availability at the right price.

Ellipse EAM supports the procurement process by identifying, evaluating and selecting suppliers, and placing and monitoring purchase orders and procurement agreements, including component repairs; sets parts warranty terms. Order generation can be automated for frequently purchased items, thus freeing up the purchasing agent’s time from repetitive, low-value tasks, to focus on better understanding the market and negotiating better commercial conditions.

Warehouse operations

> Used by warehouse and operations personnel to progress inventory through material movement transactions, such as receipts from vendors, transfers between warehouses, requests and issue of materials for maintenance work, etc.

Ellipse EAM provides comprehensive warehouse functions designed to facilitate processing of the large number of issue, receipt and transfer transactions that typically occur in high-volume environments. Users can request materials directly from the work order, thus minimizing data entry, ensuring complete, automatic and accurate cost collection (for job, equipment and cost center), and avoiding having to access separate systems for this purpose. The system will also identify items being received that are on backorder so that they can be efficiently cross-docked on the spot.

Parts warranties

Usually lost in the volume of daily transactions, unclaimed parts warranties can represent hundreds of thousands or even millions of dollars. By integrating the supply and maintenance functionality, Ellipse EAM makes it possible to automatically generate warranty claims for further processing and completion by the warranty claims manager.

Conclusion

These are only a few examples of the vital role that supply chain management plays in an operation’s value chain. When evaluating asset and work management software solutions, ABB encourages clients and prospects to consider expanding the scope of CMMS/EAM implementations to include the supply chain functions. This will better enable your organization to fully achieve the benefit of integration with the maintenance/operations workflow. ABB has many years of successful implementations of the Ellipse EAM suite, including all of the supply chain functions, which cover the materials lifecycle from cradle to grave, and are natively integrated to our asset and work management functionality, thus enabling timely materials availability and inventory optimization.

Excluding supply chain functionality from the work and asset management system forces users to undertake considerable manual entry and/or lookup in other systems. Important supply chain and work management functions are negatively affected or simply forgone – and that defeats the entire purpose of a software solution based upon best practices.

* The Gartner Group, “IT Glossary.” Retrieved from https://www.gartner.com/it-glossary/eam-enterprise-asset-management

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