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The SAP-Centric EAM Community

The SAP-Centric EAM conference caters to the EAM community that uses SAP or is considering SAP with forward-thinking strategies and EAM best practices.  The Eventful Group has developed and produced this program independently for seven years.  SAP provides support with both sponsorship and executive presentations.  The audience contains a mix of maintenance managers, IT professionals, and complimentary solution providers.  During the opening remarks, Steve Sinkoff, Managing Director, The Eventful Group, stated that there were 409 delegates (20 percent growth over last year).  That group represents 138 organizations.  Two-thirds of the attendees are from the users – the rest being solution suppliers. 

SAP Presentations

SAP executives from both Germany and the US delivered keynote presentations.  These provided insights for SAP’s future direction for EAM and manufacturing operations management (MOM).

Dr. Achim Krüger, VP EAM Solutions, SAP AG, started with the major trends for EAM, which include analytics, mobility, and a holistic approach to maintenance.  This includes asset lifecycle management (ALM) as a set of end-to-end processes through design, commissioning, operations, and then disposal.  Master data governance becomes important to achieve and keep asset data accuracy, and manage capital projects through the ALM cycle.  While the asset is operational, the trade-offs include maintenance, the impact on company performance, and risk.

Several SAP customers in the utilities industry are already PAS 55 certified or going through the PAS 55 assessment process   SAP recognizes the importance of PAS 55 as a standard (which is on the way of becoming an ISO standard) for good asset management practices including:

  • Optimized asset operations and maintenance
  • Asset visibility and performance
  • Operations risk management

An objective of SAP’s product strategy includes improving the efficiency of workers with good usability.  Achim stated that SAP has improved usability and will continue to make progress in this area. 

Paul Boris, VP, Advanced Manufacturing Solutions, SAP Americas, spoke of the “Perfect Plant” program at SAP.  This bridges both maintenance and operations, which is consistent with ARC’s Asset Performance Management (APM) strategy.  The drive for continuous improvement requires doing more with less, enabling rising productivity and living standards worldwide.  At the same time, people are no longer willing to accept massive industrial accidents, with risk management becoming an increasing concern.

Mr. Boris provided several examples.  These included how an alarm overload contributed to a near-aircraft accident, and out-of-sync executives who came to give a safety award the day before the Deepwater Horizon incident in the Gulf.  Key issues include faster speed-of-change, exponentially increasing complexity, and accelerating brain drain with experienced people retiring.  Mr. Boris borrowed a Lean concept for putting information and decision making at the point of action.  He used the term “flipping the pyramid,” i.e., putting the operator on top (originally from Ed Magee, General Manager of Harley Davidson’s York assembly facility).  For maintenance, the “Perfect Plant” means leveraging what you have with reduced risk and complexity to achieve “uptime at the right time.”  It aligns planning, execution and resource utilization.

Karsten Hauschild, Solution Manager, SAP Labs, LLC, had the difficult task of explaining SAP’s mobility strategy for EAM.  SAP partners with ClickSoftware and Syclo.  However, the company’s mobility strategy has become dynamic with SAP’s acquisition of Sybase, which has an excellent mobile enterprise application platform (MEAP).

Karsten reviewed the history of mobility for SAP EAM:

  • SAP Mobile Asset Management (SAP NetWeaver Mobile Infrastructure) introduced in 2004
  • ClickSoftware’s SAP Workforce Scheduling and Optimization introduced in 2008
  • Syclo SMART Mobile Suite introduced in 2009
  • SAP Mobility Solutions using Sybase announced in May 2010

Going forward, all SAP-endorsed mobility solutions will be based on the Sybase Unwired Platform (SUP).  This will be extensive, involving solutions for sales (CRM), field service, and analytics.  Mobility solutions based on SUP are being developed by some of SAP’s partners.  In the future, mobility will include more than just work order processing.  The objective is to provide a holistic picture for technician or plant manager, including core processes, plant visibility, and other enterprise processes.

Enterprise Information Management Joint Presentation

Rex Ahlstrom, Vice President Operations, SAP Labs, and Ralph Rio, Research Director, ARC Advisory Group presented strategies for asset lifecycle management (ALM) and asset information management (AIM).

Effective information management provides the foundation for physical asset performance.  Unfortunately, the quantity and accuracy of data and the associated business processes greatly hinder master data standardization and optimization.  The presentations provided a high-level review of the asset information problem and practical approaches for business process governance and complementary SAP tools.

User Presentations

Bill Townsley, Suncor Energy, reviewed the company’s data migration project and master data management (MDM) as it upgraded from legacy systems.  This project included four different systems containing 400,000 material masters with three different taxonomies.  Suncor moved the material master data from each legacy system into one new target with a common taxonomy.  The benefits included improved access to MRO spare parts and standardization across multiple plants leading to reduced inventory.  Data migration challenges included:

  • Extract from and load into a live production system
  • Complex data mapping from applications to applications
  • Moving target with changes as people learn during implementation
  • De-duplication (source data incomplete) and data cleansing after extract (not at the source)

Using the standard taxonomy, Suncor completed 85 percent of the consolidation and de-duplication of spare parts automatically utilizing SAP BusinessObjects Data Services.  Core processes are extract, de-duplicate, cleanse (name parsing, address parsing and correction, material parsing, matching), data staging & test (transform data into SAP structure, validate business rules), and load into target environment.  SAP Enterprise Information Management (EIM) provides a repeatable process to deliver consistent, sustainable results. 

Atif Sheikh, Manager of Specifications and Standardization, OMV Petrom S.A., presented how the company cleaned up its MRO material database and standardized the descriptions.  OMV managed the project internally with geographies that included multiple languages.  The company has seven warehouse hubs subdivided into 15 stores with more than 60,000 part numbers.  Issues included unsearchable database, incorrect and inefficient replenishment, inefficient procurement cycle, duplicates, wasted process times, 50 percent of work awaiting materials, false stock outs, and asset cannibalization (to obtain replacement parts).  This led to inflated inventory costs, wasted dollars spent on inventory management, increased MTTR, and downgraded asset reliability with production losses.  Using uniform schema, OMV cleaned up the data, de-duplicated the part numbers, and had searchable part numbers that users could understand.  The company went from 68,000 SKUs in 2009, to 30,000 SKUs in 2011.  The investment reached break-even within months, with an immediate 2 percent reduction in inventory at the end of the project. 

Curtis Barton, Principal, Inventory Management, Rio Tinto, and Steve Lyndon, Senior Consultant, Oniqua, provided insights for risk-based inventory management.  MRP strategies using statistical techniques to determine min/max inventory replenishment levels do not translate well for MRO parts.  Min/max works well when demand and supply have a normal distribution curve.  Unfortunately, MRO parts are often binomial, negative binomial, or Poisson.  Here, 65 percent of the parts are critical spares with little or no activity.  Risk-based inventory management techniques balance the cost of keeping MRO inventory against the cost penalties of running out to set reorder levels based on the lowest total cost.  Oniqua optimizes inventory levels based on historical lead time, historical usage (and its distribution curve), variances in lead-time, holding costs, financial impact of a stock-out, shelf life, and more.  Project savings was “in the millions,” with a fast payback.

Last Word

The SAP-centric EAM conference is an excellent venue for meeting others with similar interests to access successes, issues, and future trends.  The ecosystem of complementary software solutions was well represented from sponsors with exhibits and others.  Presentations by SAP executives and their availability for questions provided an opportunity to gain a deeper understanding of the company’s product strategy and impact on your plans.  The user presentations gave case stories for successful projects that could be applied to a variety of industries. 

If you use or are considering SAP EAM, you should consider attending the SAP-Centric EAM conference in 2012.  The dates, location, and other information will be announced on www.sap-centric-eam.com.

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