Standardization is an essential part of enterprise asset management (EAM). A business that has thousands of physical assets spread across multiple sites needs standardized processes, data, and technology for managing those assets.
This kind of standardization is widely regarded as a best practice, but many organizations struggle with it. Some are afraid that enforcing uniformity will constrict workflows and kill productivity. Others see the value in having a consistent, structured approach, but don’t know where to start.
In this blog post, we’re going to talk about the benefits of standardization; how to balance those benefits with the unique needs of each site; and how process and data models can expedite the standardization effort while providing needed flexibility.
The Benefits of Standardization in Enterprise Asset Management
Standardization makes sense. If two plants have identical pieces of equipment, they should have the same preventative maintenance (PM) routines for those machines. If a business has multiple storerooms for maintenance, repair, and overhaul (MRO) parts and materials, all storerooms should be naming and barcoding items the same way.
This is backed up by data. A 2008 survey conducted by Aberdeen Group revealed that best-in-class manufacturers (based on overall equipment effectiveness, plant throughput, and downtime) were 50% more likely to standardize asset maintenance and reliability processes across the enterpise.1 In addition, best-in-class manufacturers were almost three times more likely to standardize key performance indicators (KPIs) and condition monitoring processes.2
This makes sense. Standardization drives profit by
- enabling centralized decision-making;
- leveraging information;
- reducing total cost of ownership (TCO);
- increasing equipment availability;
- reducing MRO costs;
- minimizing and mitigating health, safety, and environmental (HSE) risks;
- improving EAM/CMMS software performance;
- and more.
Balancing Standardization with Site-Specific Needs
“But wait a minute,” you may be saying. “Not every site is the same. Where do customization and uniqueness fit into the picture?”
It’s true. Asset management is not one-size-fits-all. What makes sense at one site may not be practical at another, because each site has unique constraints and resource mixes.
What’s needed is a bit of both: standardization at a high level, with customization at the lower levels. Like singers in a chorus, everyone should be singing off the same sheet of music, but some will be singing soprano and tenor, while others will be singing alto and bass.
Asset Management Practices and Procedures
This concept manifests itself in the world of asset management through practices and procedures.
- A practice is a method or rule used in a particular field or profession. A set of practices is considered a standard. Practices operate on a high level, dictating in broad terms what must happen and how the organization does business.
- A procedure is a step-by-step sequence of activities or course of action with definite start and end points. Procedures are rules for trench warfare. They govern the day-to-day activities of the people on the front lines.
Practices should be the same across the organization. This is how the best practice become company practice. Besides, KPIs are tied to practices, and standardizing KPIs is not negotiable. Procedures, on the other hand, should be flexible. Site circumstances should determine how the practice is executed at each site.
For example, each site should develop a weekly maintenance schedule. This is a best practice and each plant should execute it. But the procedure for developing it and the timing for the delivery of it might vary a little.
It’s like the dress code at Wimbledon. Everyone has to wear white, but the cut and trim is up to them. Each player has room to express their individual identity within the “best practice.” This is how it should work with multi-site EAM standardization.
The Problem with Not Standardizing
A multi-site organization will have problems if its sites manage assets differently, do not share information, or fail to leverage technologies. Such inconsistencies will reduce efficiency in the overall operation and reduce morale. They may contribute to the demise of a productive company culture.
Silos are a growing pain for organizations of all sizes. It is the duty of the executive leaders and management to prepare and equip their teams with the proper mindset to break down these destructive organizational barriers.
Standardization is one way this happens. In fact, standardization is key to improving return on assets (RoA). When a business is spread across multiple sites, consistent asset management is essential for breaking down silos and maximizing the value that assets deliver over the long term.
The Documentation Challenge
Although standardization is widely regarded as a best practice, few companies achieve it. This failure to standardize is due to several reasons, but the biggest is the challenge presented by documentation. Businesses do not have the resources or the expertise to develop the processes, KPIs, data standards, and other documentation that are necessary to standardize asset management across the enterprise.
It’s understandable why documentation presents such a challenge. An asset management operation has many components:
- Corporate policy and organizational structure should be the same wherever the company does business. Policy, objectives, and strategy should be determined by executive leadership and communicated as a mandate to all plants. Roles and responsibilities should be identical across the organization. Every role and business function should have the same responsibilities at one site as it does at another.
- Practices and processes should be consistent. A given task, such as scheduling work or requesting parts, should be performed to the same standards regardless of the location or the person performing it.
- CMMS or EAM software systems should be configured the same way throughout the business. Screens, menus, fields, and so on should be identical from one plant to the next.
- Master data should conform to uniform standards. Equipment names, part descriptions, and other information should follow the same format at every site. Coding structures for work order priority and status, equipment class and criticality, problem and failure reasons, and all the rest should be the same for the whole enterprise.
- Performance management tools should be consistent. The same KPIs should be used, with the same performance targets, across all sites. Auditing should happen the same way across the business, and auditing tools, methods, and schedules should not vary from site to site.
Using Existing Models to Expedite Asset Management Documentation
Developing documentation for all of these components—i.e., a documented model for the whole asset management operation— may sound overwhelming. The documentation challenge can be overcome, however, by building on existing models.
SwainSmith offers two such models. SynergyTM is an organizational model for asset management, containing industry-proven policies, processes, roles and responsibilities, and other documentation. Our EAM Master Data LibraryTM contains standardized EAM coding systems and naming conventions, providing a data model for CMMS and EAM software implementations.
Our models provide a comprehensive and customizable starting point for the development of a documented model for asset management. They accelerate documentation, reduce the resources required, and provide a solid foundation of industry-accepted best practices.
Some companies dislike the idea of building their operation on an existing model. They are afraid that they will be stuck with one-size-fits-all practices that constrict their business or squeeze them into a mold designed for another organization.
In reality, a model is just a means to an end. Our models are not meant to be implemented without customization. Rather, they provide a framework with which to begin the design process. Taking advantage of them allows a business to develop a better model in less time, and with lower costs, than starting from scratch.
Standardizing a multi-site business is not a simple undertaking. There are many components to consider, and you have to find the right balance between uniformity and flexibility. But starting with best practice models, such as SynergyTM and the EAM Master Data LibraryTM, can put standardization easily within reach. They provide a consistent framework for asset management that can be tailored as needed for your organization or for each individual site. That way, you get both standardization and customization: the best of both worlds.
1 M. Littlefield and M. Shah, “Enterprise Asset Management: Maximizing Return on Assets and Emerging Trends” (Waltham, MA: Aberdeen Group, 2008), p. 2.
2 Ibid., p. 10.