Network Enabled Asset Integrity: SAP EAM meets Ariba Network in a Chemical Plant
Did you miss our hugely popular ASUG Webinar on connecting your plant maintenance processes to the Ariba Network? Lucky for you we recorded it! Even luckier if your company is already an ASUG member and can access this link.
Here is the low-down on what was discussed: Keeping your plants operating is mission critical. The financial toll of downtime in the plant should be minimized at all costs. We have seen statistics that show the daily cost of downtime being upwards of 500k! Experience shows that it can be much, much more than that. So, one way to avoid plants going down unexpectedly and to shorten the planned down times required for maintenance is to make sure all the materials you need for maintenance activities are available when those activities need to be performed. And that’s an advantage, because something like 50% of the parts required by MRO procedures are not stock items and have to be ordered when they are needed. That means lots of purchase orders, something like 3,500 for every million dollars of MRO spend.
Most people think of Ariba Network as something their procurement departments use to send POs to vendors and their AR departments use to process invoices electronically. And indeed, PO and invoice automation is one of the things the Network does well. But if you think about PO/Invoice and even Service Entry Sheet automation in the context of MRO processes, you can see that the automation has particular benefits for the MRO process.
So anything you can do to facilitate the procurement process will have a very direct impact on the timeliness of your maintenance activities, and the overhead costs involved. These benefits are easier to explain if we walk through a scenario.
In the ideal world, all the equipment in your plant has a maintenance schedule and preventive maintenance work orders are automatically generated at the appropriate intervals. And, also ideally, you’ve configured Enterprise Asset Management (Plant Maintenance) so that the parts required to perform every work order operation are listed on the work order. Your MRP run picks up these work orders, checks inventory availability, and automatically generates PO’s for the components that are not in stock. These POs are automatically routed to your qualified vendors through Ariba Network, so there’s no delay in communication with the vendor, who can send back confirmations and/or acknowledgements, so you not only know the PO has been received, but you have updated delivery dates automatically populated back into your PO.
These material availability dates are available from the work order, which has a status to indicate whether all the required components are available. This PO automation will cut down the time required to get the materials in house, so you can perform maintenance activities on time. And if the materials are delayed, at least the maintenance planners/schedulers will have visibility into when parts will be available and can replan maintenance activities around real availability dates.
OK, that’s the perfect world. In the not so perfect world, the worker who heads out into the plant to repair a piece of equipment may find that something else is required for the repair that is not on the component list on the work order. Either something else needs to be replaced, or the component list isn’t complete. There’s always something, right?
If you wonder how often this happens, just think about the last time you took your car to the shop and found out that some other part needed to be ordered to complete the repair. In this world, maintenance planners, schedulers, or other maintenance personnel need to add components to the work order, which they can do by punching out, through Ariba, to a vendor catalog specific to your company contracts (reducing number of maverick spend). They can select the part from the approved supplier catalog(or, if more than one vendor can supply the part – the vendor selection can happen later in the process) and generate a requisition, even a PO, directly from the work order. This automation not only speeds up the process of getting the part, it guarantees that the non-stock part is procured from an approved vendor, and it associates the cost of that part with the work order so you can track the cost of maintenance activities for specific equipment more accurately. And, like any other PO routed through the Network, the vendor can supply updates on the ETA through confirmations, acknowledgements, and advance shipment notices. These flow through the network, automatically update the related POs, and these updates are available from the maintenance order so there’s little or no calling and emailing around to find out when a required part will arrive. The maintenance efficiencies that result from this automation through the Network are significant.
Does this sound like the kind of experience your company has in the plant? Join the discussion and let us know.
Want more information? Contact me directly – let’s talk! Better yet – are you attending Sapphire? Use the Agenda Builder to make sure you don’t miss any of the many Ariba Network session in Orlando.