Benefits Of Lean and Enterprise Asset Management (Lean-EAM)

Introduction

The primary goal of Operations & Maintenance (O&M) is to optimize output while minimizing costs throughout the equipment’s useful life. One effective method is to employ Lean principles and implement an Enterprise Asset Management (EAM) system for equipment management.

Problem Statement

High O&M costs and subpar production output harm customer satisfaction and threaten business health and future success.

Background

All processes include value-add and non-value-add activities. Non-value-add activities represent nine types of process waste, defined as any activity that does not add value. This waste leads to inefficiencies in operations and maintenance, affecting costs, quality, and service levels. Lean methodology focuses on creating value and eliminating these wastes. Studies show that every process contains many of the nine types of waste. Lean process improvements often reveal that 50% to 90% of business activities are non-value-added before Lean practices are applied.

Equipment capital is crucial for businesses focused on ROI from equipment lifespan. The EAM management system is a necessary strategic practice used by companies with significant equipment investment.

EAM focuses on Reliability Centered Maintenance (RCM) and Supply Chain Management (SCM) which are core to EAM:

• RCM Practices

1. Maintenance & Repair (Day-to-Day)
2. Equipment Outage (Overhaul/Turnaround)
3. Equipment Lifecycle Condition Assessment

• Supply Chain Management (SCM) – Manages the flow of goods and services

Equipment lifecycles last many years, sometimes decades. To achieve ROI expectations, organizations should use an EAM system, which applies RCM—a methodology that develops strategies to optimize equipment uptime at the lowest cost. SCM is essential for maintaining healthy equipment ROI.

Solution

By incorporating these proven methods (Lean & EAM-RCM/SCM), companies can make drastic bottom-line improvements and take them to the next level of profitability. Below are examples of benefits achieved where Lean – EAM has been applied:

• Increased availability and capacity (10% – 30%) – less interruptions in production
• Top-quartile operating performance
• Reduction in materials and contractor costs between 10% and 20%
• Revenue growth – in some cases more than $50M USD
• 40 to 50% reduction in scheduled turnaround duration resulting in immediate $$ - one company increased revenue by over $15M USD.
• Positive culture transformation – pride, reduced internal frustration and increased FLOW
• Standard Operating Procedures (SOP) developed, coached, implemented, and measured

Conclusion

It is evident that businesses applying Lean thinking methodology benefit from a Value-driven culture. For capital intensive companies, application of EAM-RCM/SCM is a must. By integrating the thinking and methodology of Lean and utilizing the EAM-RCM/SCM equipment management system/tool, O&M can be optimized, resulting in higher profits and increased competitiveness.