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EAM system – focus on reducing equipment maintenance costs

SmartEAM ,
12.08.2019

The cost of repair and maintenance of equipment is the most important cost item in industrial enterprises, which affects the cost of production. Depending on the scale of the enterprise and the industry to which it relates, these costs can range from 10 to 40%. At the same time, at some enterprises, especially machine-building, up to 50% of technological equipment is idle in repair. Naturally, overpriced maintenance and repair costs have an extremely negative effect on the economic performance of the enterprise.

The main objective of automated enterprise asset management systems (Enterprise Asset Management, EAM) is precisely to reduce the cost of maintenance, repair and logistics, but without reducing the level of equipment reliability. At the same time, each production asset is considered as an element of the business that has its own life cycle and is capable of – or is no longer able to – bring profit to the enterprise.

According to the results of research by the consulting company ARC Advisory Group,  as a result of the introduction of the EAM-system, an enterprise can get the following advantages:

• Increased equipment life.
• Improving the productivity of repair services.
• Increased equipment productivity.
• More rapid implementation of restoration repairs.
• Reduction of surplus stocks.
• Increased availability.
• Reducing the number of breakdowns and downtime.

However, when deciding on the introduction of an EAM system, it is very important for the management of the enterprise to supplement these qualitative indicators with quantitative ones, on the basis of which it is possible to carry out at least approximate economic calculations, and evaluate the payback period of investments. There are no uniform methods yet, consulting companies choose different indicators for quantitative estimates, and those that coincide can give significantly different results.

For example, the TAdviser portal, referring to “world experience”, assures that the introduction of EAM can reduce equipment downtime by up to 20%, increase its useful life by 30%, increase the share of scheduled repairs by 80%, and reduce emergency and overtime by a third. work, as well as cases of stock shortages.

And here is how A.T. consulting agency assesses the benefits received as a result of the introduction of the EAM system. Kearney5 and the Community for Maintenance & Reliability Professionals SMRP.

As you can see, according to the matching parameters of the SMRP community assessment, it is much more optimistic than A.T. Kearney. For example, SMRP estimates the reduction in inventories of inventories of 50–90%, while the agency A.T. Kearney has a similar rate – surprisingly accurate – of 21%. Nevertheless, according to (less optimistic) data from the same agency, the average payback period for EAM systems is from 6 to 18 months. More accurate calculations can be made with specific figures at the average cost of stocks, losses due to unplanned downtime of equipment, operating costs, etc., which can be very different for enterprises of different sizes, especially those related to different industries industry.

Be that as it may, the introduction of the EAM system should be one of the first points in the modernization program, if the goal is to drastically reduce the cost of servicing equipment and increase the competitiveness of the enterprise.

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