Getting the Best Return on Assets with Process Manufacturing and Enterprise Asset Management
Monitoring and managing operations, as well as energy consumption is a key component of enterprise asset management (EAM) systems. However, rising energy costs and pricey new equipment make it a challenge for manufacturer to get the best return on their investment. Here we explore how to get the best ROI with process manufacturing enterprise asset management.
Companies in equipment-intensive industries like chemicals, pharmaceuticals, and life sciences anticipate rising revenues powered by a strong manufacturing sector as well as extensive growth in the healthcare industry.
Global chemical output has risen over the past two years and with it, so has the potential for growing revenues. While revenue growth is great for organizations, in order to sustain this growth and gain a return on assets the profit needs to be managed well. Some of the challenges facing equipment-intensive industries are high costs and straining regulations and penalties.
The first challenge, and possibly most troubling to the organization's daily operations, is the high variability in energy costs that comes hand-in-hand with the chemical production process. Energy use often makes up a huge share of a processing plant's cost of operation; however, energy is a completely manageable variable cost of production. Even the slightest movement in energy can dramatically impact profitability. Yet another problem is the rising cost of equipment and how to get the best return on those assets. Monitoring and managing operations, as well as energy consumption is a key component of enterprise asset management (EAM) systems.
Chemical-centric processes that involve potentially dangerous substances are subject to strict processing and product regulations, which also pose great challenges to businesses. These regulations differ just enough from country to country that filing documents becomes extremely difficult and time-consuming. Regulations complicate things, but can come with hefty penalties if not complied with.
Comprehensive asset management allows process industry executives to improve facility and asset management ability. Industry executives need a comprehensive approach that allows equal focus on all aspects of the business. Executives also need an array of equipment indicators along with the ability to manage equipment in real time. The arrival of the Internet of Things (IoT) has made it possible for computers and other equipment to communicate without human interaction – thus creating a manufacturing environment that can continuously report activity and, in some cases, update itself.
As changes such as these occur within the industry, managers and operators are able to immediately react to issues that arise. Problems with quality of products, energy usage, environmental and safety thresholds and the wear and tear on equipment can be quickly resolved, therefore saving money and preventing further issues from developing.
With accessible information and a quality EAM system capable of delivering real-time updates, executives are able to oversee assets within the facility, including energy consumption and have better quality control through available data that can save the facility money. EAM systems allow plant leadership to stay ahead of poor scheduling, equipment energy waste and identify environmental impacts as they occur.
A quality EAM system also allows executives to manage and correct the process and product performances for out-of-specification products that stem from lack of visibility and equipment, operations and maintenance problems. These problems reduce assets and labor productivity as products get scrapped and reworked.
EAM systems can also help leaders when making important capital expenditure (capex) decisions. With improved visibility into equipment and predictive maintenance in EAM systems, making these large, complex decisions becomes easier. EAM systems, data and improved visibility enable long-term, strategic decisions to be made by executives and help to accurately establish a capex budget.
Planning for sustained profitability begins at the top, as it is leaders who put the initial organizational plan into motion. When leaders are developing a plan for their organization's asset management, there are four main components to consider:
- Developing a vision for EAM involves investing in the best practices, skills, resources and business systems to monitor and manage assets. It is much more than just investing in machine maintenance – it's investing in the future profitability of the organization.
- Goals and objectives should be set that translate the EAM system's practicality into something tangible for the organization to strive towards. Some common performance indicators include energy costs per volume of output, energy productivity, labor productivity, safety incidents per hour worked and product deliveries.
- Best practices and processes should be developed for the organization. These help engage employees operating and maintaining the assets. After all, the employees are the closest to the work and have the most experience with day-to-day operations, skills, systems and solutions for improvement.
- Technology should be updated as new practices and processes are implemented. New technologies can automate repetitive tasks as well as provide insights into decision-making and monitoring of daily operations.