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Top Strategies for Asset Performance Management (APM). Mehul Shah, Research Analyst Aberdeen Group February 24 th , 2010. Agenda. Introduction Polling Questions Define Asset Performance Management Challenges Aberdeen Research Frameworks APM Research Results Recommendation for Action.

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top strategies for asset performance management apm

Top Strategies for Asset Performance Management (APM)

Mehul Shah, Research AnalystAberdeen Group

February 24th, 2010

agenda
Agenda
  • Introduction
  • Polling Questions
  • Define Asset Performance Management
  • Challenges
  • Aberdeen Research Frameworks
  • APM Research Results
  • Recommendation for Action
polling question 1
Polling Question # 1
  • What are your CFO’s TOP THREE (3) OBJECTIVES for the next 12 months?
  • Revenue growth
  • Reduce operating expense
  • Improve profitability
  • Customer satisfaction
  • Risk Management
  • Maintain or improve product and service margins
  • Sustainability / Corporate Responsibility
polling question 2
Polling Question # 2
  • What are the TOP TWO PRESSURE driving you to focus on asset management? (Select two)
  • Maximize Return on Assets (RoA)
  • Reduced operational and maintenance budgets
  • Aging assets
  • Need to comply with safety and regulatory requirements
  • Increasing demand variability
polling question 3
Polling Question # 3
  • What are the TOP TWO STRATEGIES that your company is establishing to address the pressures?
  • Implement advanced asset performance management and analytical capability
  • Establish a risk based strategy
  • Create / improve real time visibility into asset performance
  • Improve collaboration across maintenance, production and financial groups
what is asset performance management
What is Asset Performance Management?

Approach that synchronizes operations, maintenance, and engineering goals

Balancing asset availability and asset utilization

Risk Management – Maintenance based on criticality of asset

Visibility into complete lifecycle of asset – Understanding the Economic Value Add

Aligning asset performance to corporate performance

6 major roadblocks to asset management
6 Major Roadblocks to Asset Management

Asset management is still viewed as a cost center by senior management

Change in culture required to move from break fix to proactive maintenance

Lack of communication among production, maintenance, engineering and IT departments

Complex and disparate data sets present a significant road block to decision making

Lack of awareness of how asset management can reduce environmental impact

Transfer of knowledge from a few experienced employees to others

our research methodology
Our Research Methodology
  • 5,000+ Executives surveyed
  • 10,000 + data points collected per study
  • 12 Benchmark Reports planned for 2010
  • Library of 15,000 benchmark survey responses and 200,000 data points
aberdeen maturity class framework
Aberdeen Maturity Class Framework

Best-in-Class

- Top 20%

Selected Performance Criteria (KPI)

Industry

Average

Total

Respondents:

Unscheduled Asset Downtime

OEE

- Middle 50%

Return on Asset Goals

Laggard

- Bottom 30%

Respondents are scored individually across KPI

aberdeen s methodology end user investigation pace framework

Pressures:

External and internal forces that impact an organization’s

market position, competitiveness, or business operations.

Actions:

The strategic approaches that an organization takes in

response to industry pressures.

Capabilities:

The business competencies (organization, process, etc…)

required to execute corporate strategy.

Enablers:

The key technology solutions required to support the

organization’s business practices.

Aberdeen’s MethodologyEnd-User Investigation: PACE Framework

P

A

C

E

aberdeen maturity class framework1
Aberdeen Maturity Class Framework

Asset Downtime

OEE

Return on Assets

  • What are Best-in-Class companies doing differently?
  • What pitfalls are they avoiding?
  • Why are they achieving greater success?
  • What technologies and services are enabling them to succeed?
study demographics
Job Title:

26% Upper Management (CEO, COO, CFO, CTO, President, VP, Partner/Principle)

22% Director

23% Manager

10% Staff

Revenue Size

30% Small (under $50 Million)

38% Medium ($50 Million - $1 Billion)

33% Large (Over $1 Billion)

Geographies:

55% North American

17% Asia Pacific

17% Europe

9% Middle East, Africa

Industry

21% Oil/Gas

11% Consumer Packaged Goods

8% Utilities

5% Chemicals

4% Metal and Metal Products

4% High Technology Manufacturing

2% Automotive

Study Demographics

Current Survey Respondents: 139

top objectives of cfo s
Top Objectives of CFO’s

Source: Aberdeen Group, October 2009

budget changes

47%

50%

38%

40%

36%

35%

32%

31%

28%

27%

30%

22%

20%

10%

0%

Capital Expenditure

Operational Expenditure

Maintenance Budget

Percentage of Respondents, n=139

Decreased

Increased

Remained Same

Budget Changes

Source: Aberdeen Group, October 2009

top p ressures driving improvement in asset performance management
Top Pressures Driving Improvement in Asset Performance Management

Source: Aberdeen Group, October 2009

defining the best in class
Defining the Best-in-Class:

Best-in-Class

IndustryAverage

Performance Criteria Used to Identify Best-in-Class

Laggard

Operational Equipment

Effectiveness (OEE)

88%

75%

81%

Unscheduled Downtime

2%

18%

11%

results achieved by best in class
Results Achieved by Best-in-Class:

Estimated performance against corporate plan..

30%

Over achieved by 25%

25%

20%

15%

10%

Over achieved by 7%

Percentage of Respondents, n=139

5%

0%

-5%

-10%

Missed by -10%

-15%

Return on Assets (RoA)

Best-in-Class

Industry Average

Laggard

a ctions the a of pace initiatives the best in class leverage to outperform peers

Implement advanced asset performance

57%

40%

management and analytical capability

39%

Establish a risk based strategy

23%

26%

Establish continuous improvement programs

41%

Create / improve real time visibility into asset

26%

23%

performance

Synchronize asset performance with corporate

26%

32%

performance objectives

0%

10%

20%

30%

40%

50%

60%

Percentage of Respondents, n=139

All Others

Best-in-Class

Actions – The “A” of PACEInitiatives the Best-in-Class Leverage to Outperform Peers

Source: Aberdeen Group, October 2009

process capabilities
Process Capabilities

Source: Aberdeen Group, October 2009

organization capabilities
Organization Capabilities

Source: Aberdeen Group, October 2009

knowledge management capabilities
Knowledge Management Capabilities

Source: Aberdeen Group, October 2009

performance management capabilities
Performance Management Capabilities

Source: Aberdeen Group, October 2009

sustainability
Sustainability

Source: Aberdeen Group, October 2009

enterprise wide technology
Enterprise Wide Technology

73%

80%

71%

65%

63%

70%

62%

60%

50%

48%

43%

50%

42%

40%

32%

31%

30%

22%

Percentage of Respondents, n=139

20%

10%

0%

EAM - Enterprise

EHS - Environment

BI - Business

Energy Management

Health and Safety

Intelligence

Asset Management

Best-in-Class

Industry Average

Laggard

Source: Aberdeen Group, October 2009

real time interoperability

55%

CMMS/EAM and ERP

31%

33%

50%

Control System and CMMS/EAM

42%

28%

38%

CMMS/EAM and Mobile devices

23%

14%

35%

CMMS/EAM and BI

16%

17%

33%

Energy Management and CMMS/EAM

18%

7%

25%

Wireless Sensors and CMMS/EAM

18%

4%

0%

10%

20%

30%

40%

50%

60%

Percentage of Respondents, n=139

Laggard

Industry Average

Best-in-Class

Real Time Interoperability

Source: Aberdeen Group, October 2009

enablers

81%

Alerts and Alarm

44%

Management

46%

43%

Spare Parts Optimization

42%

32%

43%

Asset Analytics

31%

22%

43%

Asset Dashboard

41%

19%

38%

Master Data Management

31%

22%

Best-in-Class

33%

Mobile Solutions

17%

Industry Average

12%

Laggard

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Percentage of Respondents, n=139

Enablers

Source: Aberdeen Group, October 2009

laggard step to success
Laggard Step to Success
  • Establish executive ownership and sponsorship for asset performance and energy management strategies across the enterprise
  • Align goals and metrics across maintenance and production teams
  • Invest in analytics to provide predictive insights based on the captured asset data
  • Include energy data (consumption, costs etc) as part of the optimization process to schedule maintenance and production activities
industry average steps to success
Industry Average Steps to Success
  • Provide on-demand asset lifecycle information to maintenance and production employees
  • Invest in centralized knowledge warehouse to store asset performance, energy and operations data
  • Include energy management in corporate wide sustainability initiative
  • Invest in automation with specific focus on alarm management, dashboards, analytics, and mobile solution
best in class steps to success
Best-in-Class Steps to Success
  • Align operational performance with corporate performance to understand the impact of asset strategies on organizations financial goals
  • Manage energy consumption by developing initiatives integrated with the overall asset management strategy
  • Establish a risk based approach to ensure predictive asset management
  • Establish real-time interoperability between asset management and business systems
thank you
Thank You

Research Contact:

Mehul Shah

Research Analyst

mehul.shah@aberdeen.com

617-854-5212