EEN Typical EAM Scope Document
EEN Typical EAM Scope Document
Scope Document
Contents
1
Objectives.............................................................................................................................................. 5
Dashboard ................................................................................................................................... 11
4.2
4.3
4.4
Trending ...................................................................................................................................... 14
4.5
4.6
5.2
6.2
7.2
7.3
EAM Typical
Scope Document
Corrective Maintenance...................................................................................................... 29
Preventive Maintenance ..................................................................................................... 31
Suggested System Design.................................................................................................... 33
Reporting Requirements ..................................................................................................... 35
8.2
Safety .......................................................................................................................................... 36
SIPOC ................................................................................................................................... 36
Safety violation process / Tracking process / Walk Down .................................................. 37
Reporting requirements...................................................................................................... 38
8.3
8.3.3.2
8.3.3.3
8.4
Warehousing ............................................................................................................................... 45
SIPOC ................................................................................................................................... 45
Material Management Plan ................................................................................................ 45
Inventory dispatch .............................................................................................................. 46
Inventory Reception............................................................................................................ 47
Inventory cycle count .......................................................................................................... 48
8.4.5.1
Interfaces ............................................................................................................................................ 49
9.1
9.2
10
10.1
GAP Items........................................................................................................................................ 53
Spend Management .................................................................................................................... 53
EAM Typical
Scope Document
10.2
10.3
Planning....................................................................................................................................... 53
10.4
10.5
IT staff in Country........................................................................................................................ 53
11
11.1
11.2
11.3
Planning....................................................................................................................................... 54
11.4
11.5
IT staff in Country........................................................................................................................ 54
12
12.1
12.2
13
13.1
Implementation .............................................................................................................................. 56
Concurrent implementation ....................................................................................................... 56
Executive summary ............................................................................................................. 56
Responsibilities ................................................................................................................... 57
13.1.2.1
s Responsibilities ........................................................................................................ 57
13.1.2.2
Deliverables......................................................................................................................... 58
Financial .............................................................................................................................. 59
13.1.4.1
13.1.4.2
Payment Schedule...........................................................................................................
13.1.4.3
13.2.1.2
EAM Typical
Scope Document
13.2.3.2
High level updated project plan - Schedule ........................... Error! Bookmark not defined.
14
15
16
ANNEX 2 Requirements....................................................................................................................
16.1
Requirement categories..................................................................................................................
16.2
17
18
19
20
21
22
23
EAM Typical
Scope Document
MTBF
PM
CM
ICM
Inst
EAM
Customization
Configuration
RAM
PRV
Objectives
Client group engaged the services of Energy Experts Now with the direction to evaluate the viability of
IBM designed Maximo Enterprise Asset Management system for its power generation and Facility assets.
A key objectives of this exercise was to map out the processes at both locations and define if Maximo
could increase overall efficiency in the maintenance, inventory and purchasing areas . We also engaged
in evaluating the economic viability implementing an EAM system to help Clients executive management
better understand what value and return on investment an EAM software package could provide to their
organization.
Executive summary
An Enterprise Asset Management System (EAM) is an integral component of a vision to improve reliability
and maintenance performance (RAM) for existing assets, like the facility, or in the case of a new asset, like
the Power Plant, to setup maintenance, purchasing and inventory procedures and systems to ensure that
high mechanical availability for the asset is achieved at low cost. Most organizations that achieve
Industry Leader status have done so by migrating away from break-down type maintenance programs
to preventative & predictive type maintenance.
EAM Typical
Scope Document
This transition is well supported by an EAM system which has the following main features:
1. Allows preventative maintenance program for every item of equipment to be planned in detail
and scheduled at a defined frequency;
2. Provides a tool for recording maintenance history of each item of equipment in detail;
3. Facilitates an easy to use work order system with detailed classification of reason and type of
repair including resource requirements (manpower and materials);
4. Facilitates identification of bad actors with low mean time between failures and high
maintenance costs;
5. Facilitates planning of major turn-around and inspection activities;
6. Facilitates access to information and enables generation of reports in desired formats;
7. Facilitates improved inventory control;
8. Facilitates budget development.
Based on information from Solomon Associates (1) who have been benchmarking refineries worldwide
since 1996, refiners target to move from low availability / high cost (Facility) to high availability / low cost
(Industry Leaders) in a sustainable manner as shown in the figure below which plots availability against
maintenance cost efficiency (US$ /plant replacement value - PRV):
EAM Typical
Scope Document
The objective is migrating a Facility with low mechanical availability asset with high maintenance costs
to an Industry Leader in a sustainable manner. This requires application of proven procedures and
systems rather than simply cutting maintenance costs.
Industry leaders on average spend 2.1% of PRV in order to maintain 96-98% availability and this is done
through planning and focus on equipment reliability. The bottom quadrant of the industry spends 4.6%
of their PRV on maintenance with varying results in reliability. Statistics for the facility are as follows:
EAM Typical
Scope Document
Over the 10 years of survey data from 1,000 sites by Solomon Associates, it is clearly shown that the gap
between the industry leaders (quartile 1) and quartile 4 have been increasing. The latest publication
shows that the industry leaders performed 2.4 times better then then average fourth quartile performers
in 2011. In 2012 that gap widened and the average top-quartile performance was 3 times better than
average fourth quartile performance (2).
The methodology of management of the facility is placing pressure on expenses for maintenance which is
focusing on the wrong side of the equation and leads to long term increases in overall costs. This
methodology will lead to 4th quartile performance (1).
EAM Typical
Scope Document
The driver of maintenance cost is the condition and maintenance of the equipment. This is why a
preventive and reliability maintenance culture should be implemented in Clients company. This way
Client can apply the pressure appropriately to lower maintenance costs in the long term while significantly
increasing reliability. This is the methodology used in order to move from 4th quartile performance to 1st
quartile performance (1). We cannot stress strongly enough that there must be a culture change
regarding the way that maintenance is to be performed.
EAM Typical
Scope Document
PRV% The projection of maintenance cost for Client with implementation of Maximo and change in
operating culture. This was projected in a best case, worse case, and Average on a yearly savings
basis.
Year
Total
Savings Projection
Best Case
Worse Case
Average
1
0.00 M
0.00 M
0.00 M
2
0.54 M
0.23 M
0.39 M
3
1.09 M
0.47 M
0.78 M
4
1.64 M
0.73 M
1.18 M
5
2.20 M
1.00 M
1.60 M
6
2.76 M
1.28 M
2.02 M
7
3.33 M
1.59 M
2.46 M
8
3.90 M
1.91 M
2.91 M
9
4.49 M
2.25 M
3.37 M
10
5.09 M
2.61 M
3.85 M
25.04 M
12.06 M
18.55 M
In the worst case scenario Client stands to reduce operating costs by USD$12.06M over a period of 10
years with the implementation of an EAM system and the foundations required for a change in culture at
the facility. In the best case scenario Client could save a total of USD$25M over a period of 10 years with
the implementation of Maximo.
10
EAM Typical
Scope Document
It is important to understand that moving to a first quartile performer is a multi-year endeavor and
Maximo is one of the tools that will be used as a foundation to achieving the performance desired.
However, we are sure by year 2 you will have paid the entire cost of the EAM in reduced maintenance
expenses.
Base foundation required:
Implementation of a culture change in Clients staff increasing the understanding of the
importance of equipment reliability and its impact on overall costs.
Development of an identification system (tags) and baseline maintenance procedures for all
equipment in the facility
Development of key reports that allow analysis of maintenance to fine tune required preventive
vs. corrective vs. asset replacement costs
Implementation of a system that coordinates maintenance activities to procurement,
warehousing, reliability, and finance.
The proposal in this document will cover these four critical areas as the first step in guiding Clients journey
to lowering overall costs and becoming a 1st quartile performer.
The power generation facility is benchmarked in a similar way and the best in class performers are so
The total cost of implementation for this project for both the facility and Power Plant to help ensure you
are able to achieve the up to 25M savings.
List of References:
(1) Lessons Learned from reliability and Maintenance Benchmarking What Does World-Class
Performance Look Like? 8th Maintenance Forum Presentation by Tom Svantesson;
(2) Insights achieve top quartile performance Uncover your buried treasure by Jeff Dudley
To be able to continually improve Client needs access to information that is relevant and actionable. To
do this we will be implementing a KPI structure that will instantly display the health of Clients business
processes that are in Maximo. This will allow visibility and accountability in the performance of
maintenance, operations, procurement and warehousing.
4.1 Dashboard
11
EAM Typical
Scope Document
Maximo has a graphical dashboard configurable by user to display the most relevant information for that
person. You can have this right on your computer screen no matter where you are.
12
EAM Typical
Scope Document
13
EAM Typical
Scope Document
4.4 Trending
Understand how your preventive maintenance is impacting your overall corrective maintenance cost.
After analysis and implementation of new preventive maintenance you can trend and see the cost benefits
of the changes.
14
EAM Typical
Scope Document
If problems are identified with the MTBF of assets you can drill down into the details which will display a
paretto chart that categorizes failures types by instance so Clients engineers understand what failures are
occurring, the detail of the failures, and come up with a preventive maintenance plan or corrective action
that will eliminate future failures.
EAM Typical
Scope Document
16
EAM Typical
Scope Document
Organizational Structure
During our interview process EEN was supplied with the organizational charts for the power facility and
the facility. It is important to note that both organization structures are in a to-be state. There are several
positions in both organizational charts that not currently filled.
17
EAM Typical
Scope Document
18
5.2 Facility 1
EAM Typical
Scope Document
19
EAM Typical
Scope Document
Departments interviewed;
6.2 Facility
Management
Maintenance
Purchasing
Warehousing
Safety
While conducting the workshops with the key facility personnel to define their maintenance processes it
was requested that we do a re-engineering of the maintenance process in order to take full advantage of
the reliability and work management the system provides. It was also noted that the same process for
maintenance the power plant performs will be sufficient for the facility. Even though the detailed
instructions may change the process itself remains the same. This is a good synergy that can reduce
implementation costs of the EAM
20
EAM Typical
Scope Document
Input
Verbal Work Request
Process
Preventive Maintenance
Corrective Maintenance
Planning
21
Output
Customer
Completed work Authorization Operations
EAM Typical
Scope Document
22
EAM Typical
Scope Document
Start
Inspect
Equipment
Text
Start
Inspect Equipment
Pass/Fail
Pass
Pass/Fail
Update
Database
(excel)
Fail
Register maintenance
Verbal report /
Corrective
End
CM
Process
Register
maintenance
End
23
Resources
Process starts
They take the appropriate equipment to do the
inspection and inspect the equipment to see if it
remains in acceptable range.
The technician confirms if the values are in range.
If the values are out of the acceptable range it is
communicated verbally.
If it passes they log it into an excel spreadsheet
Once verbal communication of failure is done they
start the corrective maintenance process as
defined in this document.
Once the problem is fixed the department
registers the failure and how it was resolved in an
excel spreadsheet.
process ends
EAM Typical
Scope Document
There is no set process with input from maintenance on parts that need to be re-ordered.
Re-order is done based on warehouses analysis on historic consumption which is not best
practice. There should be an established process with extensive input from maintenance
in order to establish reliable re-order points. No information is sent to Dubai office to
assist in lowering overall procurement cost by forecasting demand.
There is no set process for inventory counts and was stated that the last count was 2 years ago.
With the information provided via excel of one warehouse the following was noted:
o
This reflects 100,000s of items missing or not accounted for in the current system based on the report
provided. This should be confirmed in detail prior to loading information in the new Maximo system.
With this information it is imperative to implement material management controls and processes.
24
EAM Typical
Scope Document
25
EAM Typical
Scope Document
Start
MRF
Step
Description
Start
MRF
Department
head approval
End
No
Department head
approval
Yes
Exist in inventory
Exist in
inventory
Dispatch
Yes
Dispatch
No
Supply Chain
Manager
No
Yes
International
No
Yes
Dubai
Sourcing
Quote
Require Owner
Approval?
No
Yes
GM Financial
approval
Owner Approval
Yes
No
Yes
GM Technical
approval
Yes
Execute PO
End
26
EAM Typical
Scope Document
SIPOC
The SIPOC exercise was conducted to define the different types of processes executed within the
maintenance department of the power plant. It established the processes to be mapped, important
inputs to start each process and expected outputs of the processes. It also aided in identifying additional
interview requirements along with assisting in defining licensing requirements for the solution. This is to
be considered the total scope of processes that were defined for maintenance.
27
EAM Typical
Scope Document
Input
CM Work Order
Work Request
PCMS Results
PM Work Order
Equivalent operation hours
Fired hours
Inspection Results
Deferred maintenance Report
Heat Rate
Trip
Alarms
Inspection work order
Spare Parts Request
Process
Preventive Maintenance
Corrective Maintenance
Planning
28
Output
Approved Work order
Completed Work Order
Scheduled work order
Purchase Request
Costs - labor/parts
Non-complete WO
Lockout Tag out
Canceled wo
Deferred work order
Inventory request
Incident report
Safety Inspection Request
Condition Report
Meter Reading
Adjusted PM schedule
Safety procedures
Technical advisor request
Closed work order
Customer
Operations
Maintenance
Purchasing
Inventory
PCMS
Warehouse
Third party (auditor / insurance)
Owner
Plant manager
Systems - EAM and ERP
Medical services
Human Resources
EAM Typical
Scope Document
Corrective Maintenance
29
EAM Typical
Scope Document
30
EAM Typical
Scope Document
Preventive Maintenance
31
EAM Typical
Scope Document
1
1.1
2
2.1
2.2
2.3
2.4
3
3.1 Inventory will follow up with the PR/PO for parts generated for the preventive maintenance.
3.2 Dispatch parts sub process (process and requirements under inventory)
4 Schedule Labor
Planner coordinates maintenance with supervisor and operations to schedule start and end time of
4.1 each PM to be conducted.
5 Preparing planning
Maintenance worker verifies everything needed is available. Gets parts ready, gets tools, ensures
5.2 brings third party if required, informs safety as required.
6 Permit to work
6.1 Confirms with safety the needs of the work.
6.2 Conducts all safety actions required by operations
6.3 Switches to secondary equipment / activates bypass etc. as required.
6.4 Gives permission to begin work
7 Conduct Maintenance
7.1 Record time spent
7.2 Record parts used tools, improvements and future modifications
7.3 Return excess parts
7.4 Follow and record adherence to the maintenance procedure
8 Pass test
If the maintenance is not acceptable and can not be corrected immediately operations will set the
8.2 status to re-work and maintenance personnel will fix
Approved with issue. This is used in the case the equipment is operational however there are
8.1 parameters need to be modified in the future for optimal performance.
8.3 Approved
9 administrative close
9.1 Planner verifies work order to ensure time spent is correct
9.2 planner verifies that dispatches were made and material was returned
9.3 Planner verifies tools were returned
9.4 Planner verifies all other administrative actions were complete
32
EAM Typical
Scope Document
33
EAM Typical
Scope Document
Text
Initialize Work flow
Type of WO?
Generate PR
Long Description
When a user or the system creates a work order it will start the workflow process. The workflow
process will check to ensure the minimum fields are filled out before letting the user proceed.
The system will evaluate the type of work order so it routes to the correct process. Critical work orders
in off hours are handled directly between operations and maintenance without the planner as the
planner is not available after working hours.
The work order is routed to the planner and the status is now PLAN. The planner conducts his part of
the business process and clicks "route workflow" when he is complete. Workorders which have a predetermined time to be completed will have an escalation 1 day, 12 hours, and 6 hours to re-notify the
planner. If the work order is still in status PLAN and there is only 3 hours left to execute the work the
work order will escalate and assign itself to the maintenance manager and send an email notification
to the plant manager, maintenance manager, and planner of the action.
This step is to route the work order directly to maintenance in the case of emergency maintenance
after hours. The maintenance person will fill out the appropriate fields in the work order and route it.
After the planner believes he has finished his duties the system will check the minimum data
requirements. If they have not been filled out the system will warn the planner and request he fill out
the data required from this step of the process. If it meets all the requirements then the planner will
hit "route workflow" and it will automatically change the status to in progress and assign the next steps
of the process.
Safety will have the task of assigning hazardous materials, precautions, and safety plan to the work
order.
Work order is assigned to maintenance and the status has already been changed to in progress. The
parts in the wearhous are already automatically reserved and confirmed as available. Maintenance
person will verfy the parts (go to warehouse and sperate them), gather his tools, and confer with safety.
Once his process is done he will hit the route work flow button and it will automatically go to
operations.
In the case the the warehouse is out of parts for the work order it will place a reserve in the warehouse,
automatically create a PR with priority based on the work order priority and route it for approval. It will
also send an email to the planner and warehouse personnel to inform them of the generated pr.
Once the safety plans is applied to the work order AND there has been a dispatch of parts or tools (if
required) and maintenance says they are ready tos tart, the work order will automatically route to
Operations Time based escalation
operations with the status of WAOPP. Operations will then print out a report from the work order that
will serve as work authorization. Once this is done the opeartor will press the "route workflow" button.
Maintenance
At this point maintenance conducts their process. Before this ends they must input the hours they
spent and return excess materials to the warehouse.
Dispatch Process
Operations acceptance
Once maintenance has finished the work. Logged their time, and returned their parts they will route
the work order for approval of operations. At this pint the work order will automatically change its
status to waiting operations acceptance.
If operations accepts the the work order it will be in a status of COMP this means the work is finished,
parts have been returned, and operations have accepted. At this point the planner reviews the work
order to ensure any documentation (attachments) is attached and information is correct (ex.
Maintenance person did not put 10 hours to lubricate a valve). Once this is done the work order will be
automatically changed to the status of closed.
END
Insp?
If it is an inspection work order it will route to an inspection process to evaluate a different set of data.
In Range
They system will evaluate to ensure the inspection data is filled out.
Safety Plan?
Generate Work Order
The system will check to ensure there is a safety plan on the work order. If not it will warn the user and
route back to the safety step.
If the inspection data is not withing acceptable tolerance levels the system will generate a follow up
(child) work order with pre-defined corrective actions. This work order will be routed to the Planner in
the status of PLAN. The work order type will be ICM (inspection based corrective maintenance)
34
EAM Typical
Scope Document
Base Report
Base Report
KPI
Base Report
Base Report
Base Report
Base Report
Graph
KPI
Base Report
Base Report
Base Report
KPI
Base Report
Report Category
Base Report
Base Report
Base Report
Base Report
Work Performance
Man hours overtime
PM vs CM costs
Work Requested and Work Orders
Inspection results
Maintenance trends
Asset lifecycle
Process performance
Estimated vs Actual
Backlog
Report
MTBF
MTRS
Planned vs. Unplanned
Safety Compliance
Unperformed maintenance
Information
Counts time between downtimes of the asset.
Counts time between down to up
total planned maintenance vs unplanned (cm)
Total safety vs total WO
Sum of downtime induced by cm work orders and sum of downtime induced by PM work orders Understanding impact of CM on overall equipment availability
Sum of closed work orders / sum of work orders in rework
Allows you to identify why rework is happening
base data
type and purpose
Asset up starts a timer asset down stops the timer. The average is MTBF
Paretto by Asset and by asset group/type
Asset down starts timer and asset up stops timer. The average is MTRS
Paretto by Asset and by asset group/type
It will group PM and inspections in one group and CM, ICM in another
Pie chart in $$ and man hours
Will evaluate the safety plans vs work orders and give a %
This will be a 1/0 report if 100% 1 and if not 100% 0. If 0 it will display the report
This report will be by TYPE (pm, cm, inspection, inspection based corrective) and the
Will evaluate all maintenance that have not been performed by their estimated finish date. data will be man hours required to complete the maintenance.
This will be a pareto chart in Hours by process step (13 steps) and priority of work.
This can be used in the future to define acceptable times based on type of work. It
This report will display how long it took each person in the process to complete their part
will also allow you to compare results if they is a process or instruction change. This
This report will look at parts and labor assigned to work order and compare to actual parts
Report will be in KPI format (green, yellow, Red) parameters of variance will be
This will pick the short description fields of the tasks in the work order which will display the
name of the task and a reference to the manual. This report will also display how it is assigned
to, hours scheduled, estimated start/complete, target start/complete, and all safety
Base Report
This will display the long description (full detailed procedure/instruction) of the work that will Base Report
This report is a graph report with a line for each set of data to show trending over
count and cost of PM, CM, ICM, Inspection reports
time and understand the financial implications of increasing any aspect of
Sum of cost of PM and CM workorder cost yearly vs replacement cost.
KPI red green yellow for assets.
IN maximo there are fields of the values of inspections the report will display the historical displays inspection results and quantity of CM work orders produced based on
readings.
results.
this is a weighted kpi consisting of estimated vs actual, backlog, and CM's, process
performance. Each of these will be assigned a weighted value to produce a single KPI that will This will be a gauge (red, green, yellow) report for the overall health of work
quickly identify the overall health of work performance.
performance.
System will check let them define overitme hours and display cost and time
this will guage overtime expense per work order
sum of CM work orders costs / sum of PM work orders costs
Allow understanding of PM orders reduction of cost
SUM count of work orders in request status and sum of work orders in all other statuses except canceled,
Allows to and
understand
count ofthe
canceled.
how many work requests are not converted to work orders
Reporting Requirements
Under the reporting requirements we are not listing the base reports that can be extracted easily from the system (work order list by type, by
date, by person etc). We are listing non-standard reports and kpis which will require development and/or have a significant impact on the ability
of your organization to continually improve and increase the ROI of the program.
Base Report
35
EAM Typical
Scope Document
8.2 Safety
SIPOC
Supplier
Input
All internal departments Inspection
Vendor
Violation
CAR
NCR
Report (verbal or written)
Safety Walk downs
Work Order
Unsafe condition
Unsafe Act
Equipment inspection
Process
Safety Walk down
Tracking Process
Safety Plan
36
Output
Violation
CAR
NCR
Accident/incident Report
Safety Plan
Medical Report
Observation
Customer
Violator
Plant Manager
Insurance Company
Owner
Emergency services
EAM Typical
Scope Document
Start
Safety W alk
down
Verify
Document
Short Description
Start
Inspect
W orkplace
pass/fail
Verify Document
Inspect Workplace
Pass
Long Description
Process starts with the generation of a safety walk
down or a report of unsafe condition.
Safety Verifies that it has the correct document for the
safety inspection.
Safety walk down is conducted
Fail
pass/fail
Violation
Violation
Corrected
Yes
Corrected
No
CAR
Corrected
CAR
Corrected
Yes
No
NCR
Correct
Failure / CM
W O process
End
37
EAM Typical
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Report Category
MSDS Tracking
Inspection Compliance
Safety violation %
Tracking Report
Report
Violation to NCR
Information
Sum of inspections completed by estimated finish date vs sum of work orders open past estimated finish date.
base data
Base Report
Safety Performance
Scope Document
Base Report
Reporting requirements
KPI
38
EAM Typical
Scope Document
Input
Purchase Request
Purchase Order
Material Request form
Restock request
Approved purchase request
Vendor evaluation form
Item Request
Technical Advisor Request
Process
Purchase request process
purchase order process
vendor inclusion process
Item Inclusion process
Output
Item request
Approved Purchase order
Rejected purchase request
Canceled purchase order
Rejected purchase request
Canceled purchase Request
Approved purchase request
Approved vendor
Approved Item
Justification for purchase
Turn around time report
Customer
Vendor
Maintenance
Warehouse
Purchasing Approvers
Inventory
operation
Purchasing process
Due to the structure of the company we will recommend the following approval levels. This process
greatly depends on the warehouse management process and clear communication with asset
maintenance requirements. This process is automated, it forwards the purchase requisition and purchase
order to the relevant parties as well as checking the status of inventory prior to allowing a request to be
processed. This will significantly reduce the procurement time for Client and reduce procurement costs.
39
EAM Typical
Scope Document
Start
In inventory
Item Exists
Item Creation Process
Restock or New?
In country or external?
Standing Po?
Quotation Process
Technical Approval
Committee?
Financial Approval
Committee approval
PR Approved Generate PO
End
Re-order Process
There is currently no documented re-order process for Client in their facilities. This leads to overstocking
materials not required to conduct maintenance and operations of either facility. Management of reorders and inventory is a critical aspect to spend management which will allow Client to significantly
reduce their spend.
40
EAM Typical
Scope Document
8.3.3.1
We recommend that Client start with a periodic re-ordering schedule before moving fully to perpetual
reordering. This is because we believe Client must first establish a clean history to compare with
maintenance projections in order to fully move to perpetual re-ordering without risk.
8.3.3.2
L = Lead-time
YC = Average yearly Consumption
FD= warehouse demand
EOQ = Economic Reorder quantity
ROC=Re order cycles per year
ROP = Reorder points
SS = Safety stock
8.3.3.3
Yearly consumption at warehouse is estimated to be 144 a year for an item and this warehouse will run
24 re-orders in a 1 year period. The lead time from the vendor to the warehouse is of 2 re-order cycles (1
month in this case). Every time they run re-order the stock will replenish up to the ROP (18) + 6 for a total
of 24 in total stock or 2 months of inventory on hand for this item according to consumption. The
warehouse should seldom be below the 18 in stock as we will be replenishing its usage every two weeks.
YC
144
ROC
24
Leadtime
EOQ
ROP
18
41
EAM Typical
Scope Document
SS
With this methodology there are a few areas where we can benchmark that will be beneficial for Client.
For example:
a. If the warehouse has a quantity higher than EOQ + ROP we will be able to identify that as
excess stock to adjust the re-order process.
b. If the warehouse goes over 2 cycles without having to execute a re-order on certain items
we are able to flag this item for review and adjustment as we are assuming we will need
to buy this item every 2 weeks and if this is not triggered in a 4 week period it would
indicate we are overstocking that particular item and need to bring down the EOQ and
ROP.
c. If the warehouse ever hits Safety stock we can flag the item for review as it would be a
good indicator that we are under stocking the item.
d. This puts Client in a situation where we could easily switch to full perpetual replenishment
theory and move away from the cycles for re-order without risking inventory and
establish a service level requirement that we will be able to meet. However to make this
switch it would be best to have a stronger history of consumption and we need to
understand the Cost of a PO and the cost of stocking items.
Spend Management
Client currently does not have a spend management process for procurement. This process will be
designed and implemented in Client as well as a documented procedure / manual to ensure compliance.
The Maximo system will be designed in a way that the data required for the process will be included in
the reports.
Procurement Planning
At the start of every year Client will conduct a procurement planning meeting in order to accurately
project procurement needs for the next year. This meeting will then be conducted every 3 months to
review and approve the procurement plan. The
42
EAM Typical
Scope Document
Objective
The objective of the meeting will be to communicate with data from Maximo and forecast part
consumption in order to identify opportunities for negotiation with vendors in order to lower overall
procurement costs.
Inputs:
Part utilization reports
Re-order performance
Maintenance parts forecast report
Vendor evaluation and historical pricing report
Spend management report (what % of spend goes to which suppliers)
Outputs:
Yearly procurement plan
Pre-approved stocking levels (re-order points)
Vendor negotiation list
Target pricing for parts
With these outputs procurement will engage in negotiation with the pre-approved vendors in order to
lower the overall cost of parts. The procurement personnel will also have a knowledge of when parts will
be required this will allow them time to ensure the best possible prices for the items are obtained and
that vendors are aware of the needs so they have stock for the items required. EEN will develop the full
procurement plan and train Clients personnel to execute and manage it.
43
EAM Typical
Scope Document
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Base Report
Report Category
Realized savings
negotiated savings
Vendor Analysis
Un needed requests
Error %
ASL health
Report
creation of PR to approved PO
Information
Differential between the average purchase price and contract negotiated purchase price
Benchmark between average delay of delivery per vendor and price variances in purchases.
Count of PR rejections
Count of PR and time for each step of the process for it to become a PO.
Understand how well your inventory is stocked and your operational planning ability
base data
KPI
Purchasing ROI
Reporting requirements
To monitor procurement we suggest Client have at minimum the following reports.
KPI
KPI
44
EAM Typical
Scope Document
8.4 Warehousing
SIPOC
Definition of inventory process
Supplier
Third Party vendor
maintenance
Purchasing
Administration
Input
Purchase Order
work order
Material request form
Automated restock point
Inventory balance report
Process
Reciept Process
re-order process
dispatch process
inventory count process
Item inclusion
Return process
Rotating asset process
Output
Re-order points
stock/nostock report
dispatch slip
reciept slip
inventory balance report
purchase request
inventory dispatch report
Inventory reciept report
approved ITEM
Customer
Maintenance
administration
accounting / ERP
purchasing
45
EAM Typical
Scope Document
Inventory dispatch
It is important to note that prior to the inventory dispatch process the system checks for parts availability
and reserves them. The only reason to not have parts when filling a work order is due to erroneous
balances or items that are already on Purchase Requisitions.
Start
Text
Resources
Start
Pre-pick?
Pre-pick?
No
WO number
Yes
Exist
Yes
All Items?
No
Add item to
WO
No
Yes
Dispatch
Create PR
End
46
EAM Typical
Scope Document
Inventory Reception
Step
Start
Description
Start
System checks to ensure a purchase
order for this item exists
If a purchase order does not exist
the system will create a PO and
PO Process
send for approval and notify the
user he can not receive items
without an aprpoved PO.
The system will check of the
Match?
quantities input in the reciept
match the quantities ordered.
The warehouse person will be
allowed to enter the values for
Pass Inspection?
inspection if the material requires
inspection prior to reciept.
PO exists
PO exists
No
PO
Process
Yes
Match?
No
Resolved?
Reject
Yes
Pass
Inspection?
Yes
Resolved?
Yes
Staging
Reject
Bin?
No
Staging
Define Bin
Yes
Bin?
Stock
Define Bin
Stock
End
End
47
EAM Typical
Scope Document
Step
Start
Generate ABC
count
Generate ABC
count
Above
tolerance
description
Start
Full
inventory
Count
Scheduled
Above tolerance
Full inventory
Count Scheduled
Register count
results
Register count
results
End
End
48
System generates
an ABC count
process. This will
take 5% of A, 5% of
B and 10% of C to
count.
system checks the
counts to see if
they are above or
below tolerance
levels
If the system sees
violations of the
tolerance levels it
will trigger a full
count.
system stores the
count results.
EAM Typical
Scope Document
8.4.5.1
The requirements for cycle count are mainly business process specific and not system specific.
Category
Categorization
Categorization
Acceptable variance
Review process
Periods
Description
Must categoirze inventory in A, B and C
Must define A, B, and C categorization paramanters.
must define acceptable varience (2-5% normally)
Must define a process to review the count accuracy and
selection of vendor. This occurs outside of the system.
Define how often the cycle count is to take place
type
system
business
business
business
business
Interfaces
During our interviews we believe there are two options for interfacing Maximo to the existing software in
Client. There is a strategic initiative to consolidate separate systems under one portal which is best
practice when a company is segmented systems. We outlined an option to interface into the existing
portal and an option of interfacing directly to the ERP.
EAM Typical
Scope Document
o
o
o
o
o
o
o
Invoice
o
o
o
o
o
o
o
Example:
Item Cost
Status
Date
Vendor
Site
Organization
Warehouse
PO Number
Item
Quantity
Cost
Holding account
Vendor number
Date
50
EAM Typical
Scope Document
Drawbacks:
The key risks to this type of interface are modifications that will be made to the purchase
requisition within the portal. If not handled correctly within the portal the data sent back to
Maximo can cause interface failures.
This type of interface requires larger maintenance.
No Maximo workflow to control process
Benefits:
Single system for all procurement regardless of system utilized at site
Consolidated reporting
51
EAM Typical
Scope Document
Drawbacks:
POs that are not for local organization will be handled through a different system (ERP).
Benefits:
Easily maintainable interface
52
EAM Typical
Scope Document
10 GAP Items
The major GAP items identified during this process were directly related to the business processes. The
Maximo system can meet the needs of the to-be processes without any customization and only
configuration.
10.3 Planning
The facility does not currently have a planner dedicated to managing maintenance for the facility. Normal
facility management requires 1 planner every 15-30 resources in order to accurately plan and manage the
work required.
10.5 IT staff
Currently there is not an qualified Maximo administrator, once the project is complete there will be a
need of local support for the system. We suggest both the facility and the power plant have two
planners/administrators and minimum one IT person.
EAM Typical
Scope Document
Below we will outline the steps required in order to overcome the GAP items identified. Addressing these
issues are required in order to maximize the benefit of implementing an EAM system such as Maximo.
Closing these GAPs will allow Client to begin the journey for first quartile performance.
11.3 Planning
Energy Experts Now will provide 10 days of training for a planner at the facility. As an optional
engagement Energy Experts Now can provide 1 full time planner for 12 months in order to help transition
from break/fix to preventive maintenance.
EAM Typical
Scope Document
Type
1 Full
2 Full
1 Full
1 Full
1 Full
1 Limited license
2 limited license
2 limited license
1 Limited license
2 Limited license
5 Limited license
1 Limited license
6
14
12.2 Facility 1
55
EAM Typical
Scope Document
Position
reliability engineer
Planner
Refinery manager
owner representative
IT
HSE Advisor
Operations Manager
technical services manager
Process engineer
static equipment inspector
quality systems
maintenance manager
superintendants
warehouse manager
Sr engineers
Document control
Limited
Full
License
Type
1 full
1 full
1 Full
1 Full
1 Full
1 Limited
1 Limited
1 Limited
1 Limited
1 Limited
1 Limited
1 Limited
4 Limited
4 Limited
5 Limited
1 Limited
21
5
13 Implementation
There are two implementation paths that you can execute to have Maximo installed.
Implementation concurrently (cost efficient)
Implementation separately (more expensive)
56
EAM Typical
Scope Document
For the facility the first stage would be to fully code the equipment at the plant and develop a preventive
maintenance plan based on manufacturers recommendations. To accomplish this Client will have to
outsource the development of the maintenance procedures and temporarily augment staff in order to
execute them once they are in the system.
Spend management / warehousing
Currently there is no set process to benchmark the efficiency of the procurement process in Clients group.
This is leading to paying higher prices because there is no coordinated planning to enable procurement to
reduce total spend per item. We recommend Client first implement spend management theory as well
as warehouse planning. This will require a temporary staff augmentation to develop the processes and
procedures for these departments.
Maintenance Planning
If Client does not have a planner on staff this resource is one of the cornerstones of moving to a corrective
maintenance based organization to a preventive maintenance based organization. EEN highly
recommends that Client hire a planner(s) prior to the implementation and dedicate the planner full time
to the implementation of Maximo. EEN will train the new planner on his duties and how to execute them.
The remaining items are standard EAM data requirements and configurations. These items are included
in the project plan.
Responsibilities
13.1.2.1 Clientss Responsibilities
a. Provide EEN with complete equipment list coded in KKS in excel format for the power plant
b. Provide all relative financial data required in Annex 1 where it is not specifically stated that the data
is Energy Experts Now responsibility.
c. Provide 2 dedicated resources for the power plant in order to implement the system.
d. Provide 1 dedicated resource for the Facility for the implementation of the system.
e. Provide detailed maintenance plan for the power plant.
f.
g. Provide airfare, lodging, transportation and per-diem for all on site resources.
h. Hardware for test, development and production environments.
57
EAM Typical
Scope Document
i.
j.
Any taxes or fees except for those imposed on EEN by its home country of Panama.
b.
Provide 2 remote full time report writers for custom report development
c.
d.
Provide 2 on-site subject matter experts to create maintenance procedures for the facility.
e.
Provide 1 on site subject matter expert to develop spend management and warehouse management
procedures.
f.
a.
Deliverables
Fully developed to be processes in accordance to the scope of this document (section 14)
b.
c.
d.
e.
f.
g.
h.
i.
j.
System go live
k.
EAM Typical
Scope Document
Financial
This will be a turn-key implementation of Maximo as well as the development of the business processes
to fully maximize the potential of the system to reduce downtime of the assets and operational costs of
both the facility and power facility.
59