How to increase ROI and efficiency with EAM
An effective asset management and maintenance system holds the key to greater return on investment
The management of physical assets, from tools and equipment to movable fleets and infrastructure, is critical for asset-intensive businesses. Whether the goal is to grow revenue, reduce downtime or improve asset performance, an effective asset management and maintenance system holds the key to greater efficiency — not to mention the role it plays in improving maintenance strategies, with asset failure costing businesses 10 times more in repairs and lost production than it does to implement a proactive approach to maintenance.
The asset management and maintenance market is dominated by two tools? computerized maintenance management system (CMMS) and enterprise asset management (EAM) software. While on the surface, these two solutions seem to do the same thing, they do not. Whereas both are geared toward maintenance management, EAM provides a more robust and complex approach that goes beyond the capabilities of a CMMS.
Although similar in their approach to maximizing the performance and useful life of physical assets, there is a defined difference between a CMMS and EAM toolset. For example, both systems are designed to optimize asset maintenance, offer cloud-based subscriptions and provide various inventory tracking features. But that’s just the beginning when it comes to EAM; the natural stepping stone for a fast-growing organization wanting to greatly increase its efficiency when managing assets.
As lines continue to blur between the two asset management models, particularly with the advertisement of EAM/CMMS hybrid models, it’s important for asset-intensive business owners to know the difference between EAM and a CMMS (see Figure 1).
What a CMMS is
A CMMS does exactly what it says on the tin; it manages maintenance in a computerized system. Although capabilities can vary and tools can be added to work alongside a CMMS, its capabilities are limited to managing the maintenance of physical assets. However, EAM tools have an additional focus on asset performance analysis and total cost of ownership (TCO).
That doesn’t necessarily mean a CMMS is the wrong choice. The right system will provide tools to streamline maintenance operations and deploy a proactive maintenance approach, whether preventive, planned or predictive. Its ability to manage work orders and assist with spare parts at a reasonable purchase price makes it an attractive solution for most small to medium maintenance operations.
What EAM is
EAM is a more powerful, robust and complex tool in terms of asset maintenance management. A focus on maintenance management is just a fraction of its capabilities, providing enterprises with detailed data regarding their most critical physical assets.
Typical features of an EAM system include work order management; supply chain and inventory management; maintenance, repair and operations (MRO) planning and procurement; project management; accounting; safety and compliance; and big data analytics to gauge TCO.
With this collective arsenal of data gathering tools, businesses can store and analyze large amounts of information such as purchase costs, repair history, energy usage data, audit trails and more. By being able to collect such data, businesses can take full advantage of what an EAM solution is intended for: efficient asset lifecycle management.
Importance of lifecycle management
No matter the type or size of a business’s operations, all asset-intensive organizations rely on the proper upkeep of their assets, particularly in industries like manufacturing and utilities where large assets such as machinery and infrastructure make up a large portion of operations. Which is why, for organizations that center revenue around the output of their assets, successful asset lifecycle management is vital.
There are four stages of asset lifecycle management: planning, procurement/acquisition, operation and maintenance, and disposal/replacement. Whereas a CMMS is geared more toward the operation and maintenance phase of an asset’s lifecycle, EAM tools have the capabilities to function at all four stages.
One person who knows the benefits of deploying an efficient asset management and maintenance system is Ryan Batchelor, maintenance manager at Britvic Plc.: “We only run 24 hours, Monday to Friday. At the weekends, we shut down for planned maintenance activities…So when we start up on Monday, we’ve got smooth sailing for the week,” he said.
Being able to control the lifecycle management of each physical asset in one centralized system can be a revelation for asset-intensive businesses. Not only does it simplify data analysis and help to seamlessly share information across the right departments, but it also benefits businesses by:
- Calculating asset depreciation values
- Prolonging optimal asset performance levels
- Designing preventive maintenance strategies
- Ensuring compliance with regulatory standards
- Comparing the costs of asset procurement and replacement.
More than maintenance
Compared with a CMMS, EAM software is the obvious choice for large organizations to manage fixed assets throughout multiple sites. The ability to track lifecycle costs (LCC) and provide greater analysis across many workplace departments such as accounting and engineering, makes it much more than just a maintenance management tool (see Figure 2).
For businesses to maximize asset utilization, effectively manage ageing assets and optimize maintenance management, they need a software solution with the right features, which include:
- A fixed asset register
- Work order management
- Maintenance scheduling
- Fleet management
- Asset valuations
- Investment management
- Materials management
- Inventory tracking.
Luckily, these features are standard for most modern solutions. As is, crucially, the ability to use integrated Internet of Things (IoT) devices — better known as the Industrial Internet of Things (IIoT).
Asset management and maintenance systems are at their most productive when being able to collect data. This is achievable with internet-connected tools such as low-cost sensors. These sensors are placed within mission-critical assets such as machinery, equipment and infrastructure.
Not only do IIoT devices enable more accurate data readings to be collected and stored in a digitalized system, but they also allow for faster and better decision-making among maintenance managers.
Being able to collect data in real time opens the door to a wide range of possibilities for businesses in their quest to better maximize asset efficiency. As well as opening new revenue streams. Whether it is monitoring asset condition, energy output or optimal performance readings, connected IIoT devices go hand-in-hand with EAM software.