Enterprise asset management isn’t just for heavy industry anymore. Today, CIOs in many sectors can combine software, wireless networks and sensors to keep tabs on all kinds of assets.
When Canada’s Coast Mountain Bus Company decided years ago to invest in enterprise asset management (EAM) software ten years ago, even the executive who approved the purchase could not have foreseen how valuable it would turn out to be. Back in 1996, the British Columbia-based company needed EAM to help track maintenance work orders for the fleet of buses it supplies to the Greater Vancouver Transportation Authority. Data was scattered across 12 different mainframe and PC-based systems, making it difficult for mechanics to get a handle on repeat problems.
So Coast Mountain Bus bought software from Datastream Systems, now owned by Infor. The software tracks 1,100 buses and more than 25,000 components. It also schedules repairs and links to GPS data for efficient dispatching of mechanics.
Cost-justifying the purchase was a cinch: Thanks to Datastream’s central repository of repair and maintenance information, Coast Mountain Bus has already saved US$1 million (NZ$1.4 million) in parts warranty claims — “found money” that previously would have been left on the table.
But why stop at tracking buses? the company says it plans to expand its use of Datastream. “We can use it for buses, IT assets, buildings,” says Jeff Vogstad, its manager of client solutions. “It not only tracks asset performance; it also tracks inventory, purchasing, requisitions, scheduling of labour — it’s all done in the product.”
Classic EAM has been used for decades in heavy industries such as manufacturing, oil and gas, mining and power generation to wring every drop of utilisation out of production equipment. In those markets, the cost of unexpected downtime can reach millions of dollars per hour, and worker safety is at stake. To avoid such problems, companies have installed software from vendors such as MRO (recently acquired by IBM), Datastream and Indus International.
A typical EAM system catalogues and models assets and then automates work-order processing and the tracking of unexpected downtime and planned maintenance. Advanced EAM applications feature predictive maintenance tools, which check the asset’s condition (or, more likely, the condition of one of its components) to determine if maintenance is required.
Today, the scope of EAM has widened to include cutting-edge applications — for virtually every industry — that use sensors to add remote monitoring capabilities to the mix. The railroad industry, for example, is experimenting with technology that can track the status and condition of goods in transit. Aircraft makers have started to use technology that can monitor the condition of each component of a jet engine, alerting staff to wear on a bearing, for example, that could lead to disaster if not addressed.
EAM’s broader reach is the result of an expanding definition of the term asset. “Almost anything could be an asset. There are financial assets, knowledge assets, people assets, fixed assets, capital assets,” says Houghton LeRoy, an analyst at ARC Advisory Group. “Assets are anything of value to you.”
“It’s all about the asset. You need to know where it is, what state it’s in and whether you need to do something about it,” says Alison Smith, an analyst at AMR Research.
“Whether you’re talking about a freight car, a building’s HVAC system, a computer network, a factory floor, a container of oranges [in transit] or tissue samples going from a hospital to a lab, the bottom line is there is a need to track and understand the state of those assets.”
Though EAM technology is unquestionably mature, its adoption has been hindered by a culture that settles for reactive, rather than proactive, maintenance, says Patrick Connaughton, an analyst at Forrester Research.
Industries other than manufacturing are for the most part stuck in firefighting mode, partly because asset management silos also present a problem. Most large EAM users have multiple departmental or localised EAM systems. “Even the largest companies are still trying to centralise the management of all their assets and get a centralised view,” says Connaughton. Enterprise-level reporting of asset performance is the key to unlocking the real value, he adds. “It’s about seeing a picture of your assets in their current state, in their current value, across all different locations and geographies,” he says.
In addition to manufacturers, transportation and logistics providers were also early EAM adopters, using the software to track on-the-go assets instead of fixed assets. “There is overlap between EAM and what’s typically referred to as fleet management and tracking,” says Connaughton. Traditional EAM vendors have entered the fleet-tracking business as a natural extension.
“They’re starting to cross over into telematics — the ability to monitor things like the temperature and vibration levels — thanks to sensors placed within a truck or a trailer,” he says. These systems can also be tied to GPS tools to track the locations of trucks.
This opens up the potential for interesting applications, especially in “cold chain” distribution, or the fresh-food supply chain. For example, if a lettuce supplier buys from growers in Nicaragua, it could use advanced fleet tracking to monitor the temperature in the body of the truck to be sure the logistics provider is meeting service-level agreements. If it turned out the trucks weren’t kept at the proper temperature, the supplier would know in advance that the goods might be spoiled and would have time to make alternate plans. This could be a huge boon to an industry where wasted goods represent a very expensive problem.
Such monitoring could improve public safety, too, says Smith. In the not-so-distant future, she says, it may be possible to monitor trucks or storage facilities for the presence of bacteria and other undesirable organisms.
The telecommunications industry is the second-biggest EAM user behind manufacturing, according to Connaughton. “They use it to track the light poles, the telecom infrastructure that is underground,” he says. “They integrate the systems with [geographic information systems] so they can map out what the infrastructure looks like.”
Asset management systems can also help maintenance crews do triage to identify the biggest problems.
Some of the most exciting new EAM applications are based on sensors for remote monitoring. In an industrial environment such as a warehouse, gas pipeline or oil drilling station, it would be impractical to use cable to connect sensors on each asset. Wireless is the only way to go for these types of applications.
Radio frequency identification (RFID) technology could be used in such settings, but it’s not the only option. Mesh networking technology could also be used. A mesh network is a series of low-power “motes”, or radio transmitters, that are connected wirelessly. “You take a load of these little sensors, and you distribute them in a particular area so they can talk to each other and decide how to communicate,” says Smith. The oil and gas industry is an early adopter of mesh networking.
Connaughton cites a hospital doing a pilot mesh network project to manage intravenous machines and wheelchairs.
“They’re setting up a wireless network in the hospital and tagging the assets with an RFID tag. They can track the asset and see where it is.
“There is so much redundancy in hospitals today. There are a lot of assets within a hospital that are not tracked closely. [Tracking] helps with optimising the inventory levels in the hospital and as well as theft reduction. Both help cut costs.”
Several decades after it was invented, EAM technology is being used far and wide, in environments that were unforeseen just a few years ago. CIOs contemplating a first step into the world of asset management should “look at it as more of an enterprise challenge as opposed to a one-off Band-Aid solution”, says ARC’s LeRoy. “If a CIO is looking to become more efficient in his operations and improve the overall bottom line, EAM is one strategy that has a lot of impact.”