Newsletter for May 2008

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This month’s newsletter is from Ben Stevens and is a result of a request I received regarding wanting more articles on CMMS / EAMS systems.  Ben has been involved with CMMS / EAMS systems for longer than anyone else I know, and I am sure you will find the article insightful.  This is the fifth of a series of articles that go back to the CMMS / EAMS basics.  Ben can be reached at Ben@OMDEC.com. 

To keep this newsletter relatively short, this is intended to be a broad overview of issues for physical asset management, rather than a comprehensive discussion of the topic.

So What’s a CMMS/EAM Supposed To Do?  Part 5 – Stores Management - 2

Last time we talked about some of the financial implications of over-stocking and under- stocking stores.  Now we will look at some of the ways that we can use the CMMS system to improve our stores management – always remembering the basic idea – that our job is to add value to the organization.

Clearly the objective is to provide the best quality parts service to the maintenance technicians combined with having the right part for the right job in the right place at the right time.  To be effective, it requires a very high standard to be set – many companies target a 99+% Service Level.  But as we saw last time, this needs to be balanced with the cost of achieving this service level.

Starting from Scratch…

Most companies these days use a CMMS system to manage their stores.  Some use dedicated inventory management systems, and some use the stores management component of a manufacturing or ERP system.  In this document, let’s assume the use of a standard CMMS which:

- allocates materials to work orders

- tracks consumption, issues and returns

- maintains running inventory totals

- maintains cost data – per unit, per buy, per issue

- notifies when shortages occur

Many CMMS’s have additional functions which allow better inventory control – we will cover those later.

So assuming you have a CMMS with no data where do you start?   The kick-off point is to decide what spare parts data is necessary for the effective functioning of your maintenance operation.  This will include:          

-         part number and part name

-         part description and specification

-         unit of measure and cost per unit

-         where used (ie on which equipment)

-         any special storage or safety requirements

-         consumption levels and the lead time for replenishment

-         minimum and maximum stock levels for each part

The data collection phase is long and tedious; frequently much more data will later be collected and used, but as a starting point, don’t add more data to this list unless you can see the immediate value in collecting it.  

Next question, should you collect this data for all parts.  Answer is Yes!, but place the priority on critical parts for critical equipment – ie if you don’t have the parts in stock, then a failure will expensive in terms of safety, the environment, production or collateral damage.  Ultimately, the test will be “Do you have adequate information in your CMMS for all spare parts you use – even those you choose not to stock?”

But even in this reduced dataset, there are some key “must do’s”:

1.      Make sure you have a company-wide standard Parts description which follows a common format.  If all similar parts are consistently described, then searching for the right part becomes much easier if all the bearings (for example) have a consistent format.

2.      Adopt an easy-to-remember and consistent parts numbering system

3.      Make sure that your stores locations are clear and known, using a simple warehouse – aisle – shelf - bin numbering system

4.      Install a straightforward receiving, issuing and returns process to keep track of stock movements; AND make sure everyone uses it.

5.      Even with good record-keeping, the quantities will vary between the actual and the CMMS, so introduce regular cycle counting – concentrating on the high value, high volume and critical items.

In addition, there are some practical physical things that need to be done – aside from the CMMS record-keeping – to increase the chances that good spares management is maintained.  First, make sure that all spares are clearly marked so they can be readily identified.  What you don’t want is people spending time trying to measure connectors to make sure they have the right one (yes, we’ve all seen this in real life….).  It’s good practice to mark both the item and the bin so that errors can be more quickly resolved.  Also, stock the shelves so that the most commonly used items are close to the service wicket; this will greatly reduce picking time

Clearly there is a lot of work to do to collect the data and prepare it for the CMMS.  When planning the project, set reasonable milestones based on batches of say 100 records for similar types of spares, or classes of equipment.  A simple way of tracking progress is to write the tasks on a work order so that task completion and any delays will be highlighted at the back-log meetings; but it also ensures that resources are allocated to the project and the right priority is assigned.  Another time saving device is to use a simple data collection utility (such as an Excel spreadsheet); the data can then be transferred automatically to the CMMS.

If You Already Have a CMMS

So far, we have assumed that you are starting with an empty CMMS.  If you already have one which has inventory data in it, then the basic question is “How well is it supporting your Service Level and Value Objectives”.  If the data requires an overhaul, then the rules are essentially the same as if you are starting from scratch.  An upgrade is typically a lot easier and some of the basic decisions on which data is important will have already been made.  In this case, downloading the current data to a spreadsheet will help to identify data which is missing or wrongly formatted.

There’s a Key Job for Maintenance Too!

Beyond the work needed for the setting up of the stores data, the Maintenance Planners also needs to play their part.  A key task is to ensure that all material requirements for each job are clearly listed on each Work Order.  One company I know of, has a strict rule.  Any work order issued with any single stores part missing causes the planner to be suspended without pay for a week – that’s how serious they are!   One thing is for sure, not many errors!!  But it does make the next step very easy – that is the preparation of the materials  Pick List from the work order.  This can then be released to Stores ahead of the due date so that kit-ups can be prepared and delivered to the job site.  And in case you doubt that this canbe made to happen, I recently came across a brilliant example of this in perfect action at the top of a mountain in Peru!  So no excuses…..

Benefits and Costs

A program of this type will consume a lot of resources; to launch it, we should have a good idea of the investment and the payback.  Here are some of the expected benefits and costs – the size of the prize will of course vary with the company:

-         Technicians have parts when and where they need them – therefore reduced job delays through no parts and wrong parts.  And don’t forget that a technician on the job without the right part has the practical option of re-installing the used one – what does that do for reliability…

-         Fewer repeat trips back and forth to the warehouse

-         Faster and more efficient stock picking, and fewer errors in picking parts

-         Reduced parts duplication resulting from consistent labelling, naming and numbering

-         Higher service levels and reduced stock-outs

-         Stores set-up costs – both the warehouse and the parts identification and labelling

-         Data collection and data entry costs

-         Training costs

Our next newsletter will take the follow-up steps to improve stores effectiveness. 

Your feedback and comments are always welcome – ben@omdec.com

Upcoming

Please advise me, if there are other topics on maintenance management, project management, or physical asset management issues that would you would find of interest.

Federated Press is organizing their annual “Creating the 21^st Century Maintenance Organization” conference September 10 to 12, 2008 in Toronto.  For more information, see: http://www.federatedpress.com

University of Toronto is organizing their 4^th annual International Maintenance Excellence conference October 22 to 24, 2008 in Toronto.  For more information, see www.imec.ca

PEMAC is organizing their annual MainTrain 2008 conference November 24 to 27, 2008 in Toronto.  They are also organizing a MainTrain conference September 25 & 26, 2008 in Edmonton.  For more information, see http://www.maintrain.ca /

Contact Us

To provide feedback on this newsletter, including comments on past articles, ideas for future articles, or to remove your name from distribution of this newsletter, please e-mail me at len@asset-management-solutions.com. 

Please feel free to contact us to discuss any of your physical asset management requirements.  For more information on how we can help you, please contact me directly. See our web site at: http://www.asset-management-solutions.com for other information on Asset Management Solutions, including asset management issues and solutions.

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