Optimize Your Manufacturing Equipment With EAM Nancy Majure EAM Specialist, QAD Inc From MRO to Project Management

2 The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. Safe Harbor Statement Optimize Your Manufacturing Equipment with EAM

3 Getting started with optimization How Enterprise Asset Management (EAM) supports the Effective Enterprise EAM functional areas -Project controls -Indirect (MRO) inventory & purchasing -Maintenance Using EAM to optimize equipment utilization Presentation Agenda Optimize Your Manufacturing Equipment with EAM

4 QAD’s EAM solution supports the Effective Enterprise by: -Optimizing your asset utilization -Delivering a complete suite that supports all phases of the equipment life-cycle -Incorporating best practice processes -Enabling and promoting greater asset utilization -Aligning asset performance with strategic goals Overview Optimize Your Manufacturing Equipment with EAM

5 Getting Started Optimize Your Manufacturing Equipment with EAM

6 Understand “equipment life-cycle” Know your current status Know why you should care Understand Return on Investment Define your strategic goals Getting Started Optimize Your Manufacturing Equipment with EAM

7 Equipment Life Cycle Optimize Your Manufacturing Equipment with EAM Commission Operate Maintain Retire / Replace Design Construct EAM Project Controls EAM Asset Management Equipment & Asset Life-Cycle Acquisition Phase: budget controls, acquisition cost, reliability & maintain- ability Operation Phase: maintenance, cost of ownership 20% of life cycle costs 80% of life cycle costs

8 Know Your Current Status Optimize Your Manufacturing Equipment with EAM CM Reactive Best Practices PM 100% 0% >85% <15% PM World Class Stage 1 Run to failure No records Stage 2 PM Critical Assets (Cal) No CM recorded Stage 3 PM Program (Cal) Some CM recorded Stage 4 PM (Cal & DUOM) All CM recorded Stage 5 PMs and PdMs All CM recorded Functional AreaEstimated Stage Project Controls Purchasing Processes Inventory Controls Plant Maintenance

9 Know Why You Should Care Optimize Your Manufacturing Equipment with EAM BenchmarksVery Reactive 2 Basic Maintenance Program 2 Best Practice 1 World Class 1 Production Breakdown Losses 25%-30%15%-20%5%-12%1%-2% Maintenance Cost as % of RAV* 25%-30%15%-20%3%-9%2.5%-3.5% MRO Cost as % of RAV* 15%-20%10%-12%2%-4%0.25%-0.75% * RAV = Replacement Asset Value 1 – Maintenance and Reliability Best Practices, Ramesh Gulati 2 – Author’s estimated percentages

10 Know Why You Should Care Optimize Your Manufacturing Equipment with EAM Example: QMI Manufacturing -RAV = $10,000,000 -Annual Sales = $100,000,000 BenchmarksVery Reactive 2 Basic Maintenance Program 2 Best Practice 1 World Class 1 Production Breakdown Losses $25 - $30mil$15 - $20mil$5mil - $12mil$1mil - $2mil Maint Cost as % of RAV* $2.5 – $3mil$1.5 – $2mil$300k - $900k$250k - $350k MRO Cost as % of RAV* $1.5 - $2 mil$1 - $1.2mil$200k - $400k$25k - $35k * RAV = Replacement Asset Value 1 – Maintenance and Reliability Best Practices, Ramesh Gulati 2 – Author’s estimated percentages

11 50% of companies experience payback in less than 12 months Typical savings: -Reduction in maintenance expense 10% to 30% -Increase in production yield 3% to 5% -Reduced maintenance downtime 20% to 40% -Reduced scrap / rework 5% to 10% -Reduction in annual purchases 5% to 15% -Improved labor utilization 10% to 30% -Increased equipment service life 2 years Return on Investment Optimize Your Manufacturing Equipment with EAM

12 Goals should -Align EAM business processes -Leverage single source EAM system -Support equipment peak efficiency Measures for performance should -Be easy to measure -Drive the desired results -Be difficult to manipulate Define Your Strategic Goals Optimize Your Manufacturing Equipment with EAM

13 How EAM Supports Effective Enterprise Optimize Your Manufacturing Equipment with EAM

Align With a Single System Optimize Your Manufacturing Equipment with EAM Indirect inventory processes Project controls Equipment efficiency Maintenance processes Indirect purchasing processes 14

Usability improvements -Rationalization of data entry -Reorganized screens Interface enhancements -Fixed asset integration -MSW/PSW exposure to EAM work orders -SCP integration Revision history New in EAM 12.6 to Support Single System Optimize Your Manufacturing Equipment with EAM 15

Usability – Reorganized Screens Optimize Your Manufacturing Equipment with EAM More logical data grouping Improved data entry flow 16

Interfaces – Fixed Assets Interface Optimize Your Manufacturing Equipment with EAM Capitalize new asset Utilize actual spend from -Project level, or -Job level 17

Interfaces – MSW/PSW Optimize Your Manufacturing Equipment with EAM Exposes EAM WO’s to scheduling Provides production visibility to required equipment downtime 18

Export RFQ’s to Supply Chain Portal Import responses for purchasing Interfaces – Supply Chain Portal Optimize Your Manufacturing Equipment with EAM 19

Supports compliance Provides detailed traceability Revision History Optimize Your Manufacturing Equipment with EAM 20

21 EAM and Project Controls Optimize Your Manufacturing Equipment with EAM

22 “Birthplace of Assets” Budgetary control PLUS... Design -Reliability (measured by MTBF) -Maintainability (measured by MTTR) Construction -Standardized spares -Accessibility Commission -FMEA -RCM -BOM -Maintenance plan What is Project Control? Optimize Your Manufacturing Equipment with EAM

23 Capital -Profit enhancements -Increase capacity -Replacement Expense -Annual rebuilds -Marketing / legal / etc. Customer Funded -Progressive billing -Very common in automotive verticals Types of Projects Managed in EAM Optimize Your Manufacturing Equipment with EAM Key characteristic: results in new asset(s) Key characteristic: no assets created Key characteristic: customer owns asset

EAM and Equipment Optimization Optimize Your Manufacturing Equipment with EAM Indirect inventory processes Project controls Equipment efficiency Maintenance processes Indirect purchasing processes Utilize EAM to Control budget Improve design Track real-time financials Manage customer funding Capitalize assets Commission to operations 24

25 Project allocations Fixed asset cross reference Enhanced cost analysis Analysis by activity NEW in EAM v12.6 Projects Optimize Your Manufacturing Equipment with EAM

26 Project Allocations Optimize Your Manufacturing Equipment with EAM Project Level Job Level

27 Fixed Asset Cross Reference Optimize Your Manufacturing Equipment with EAM

28 Enhanced Cost Analysis Optimize Your Manufacturing Equipment with EAM

29 Analysis by Activity Code Optimize Your Manufacturing Equipment with EAM

30 EAM and Indirect Inventory / Purchasing Optimize Your Manufacturing Equipment with EAM

31 “MRO” – maintenance repair operations Repair parts plus... -Internally fabricated parts -Supplies -Consigned / vendor-managed -Free-issue / company catalog Goal is to ensure right parts are available -At the right time -At the right price -In the right quantity -To sustain availability of plant assets Indirect (MRO) Inventory and Purchasing Optimize Your Manufacturing Equipment with EAM

32 Utilize full EAM solution Leverage buying power Utilize EOQ analysis to right-size inventory Secure inventory Improve physical layout Automate stock replenishment Free buyers for more strategic activities Know where parts are used Standardize parts Understand difference in Indirect Indirect (MRO) Best Practices Optimize Your Manufacturing Equipment with EAM

EAM and Equipment Optimization Optimize Your Manufacturing Equipment with EAM Indirect inventory processes Project controls Equipment efficiency Maintenance processes Indirect purchasing processes Utilize EAM to Authorize Control Link to indirect Analyze Improve 33

EAM and Equipment Optimization Optimize Your Manufacturing Equipment with EAM Indirect inventory processes Project controls Equipment efficiency Maintenance processes Indirect purchasing processes Utilize EAM to Control Right-size Standardize Analyze Automate 34

35 Blanket orders Redesigned quotes Improved purchasing workflow Intrastat support Physical inventory by location NEW in EAM v12.6 Inventory/Purchasing Optimize Your Manufacturing Equipment with EAM

36 Blanket Orders Optimize Your Manufacturing Equipment with EAM

37 Redesigned Quote Module Optimize Your Manufacturing Equipment with EAM

38 “Previously authorized” concept Additional controls -Modifications to ordered POs -Rerouting visibility -Status alignment with ERP Improved Purchasing Workflow Optimize Your Manufacturing Equipment with EAM

39 Intrastat Support Optimize Your Manufacturing Equipment with EAM

40 EAM Functional Area: Maintenance Optimize Your Manufacturing Equipment with EAM

41 Preventive AND corrective maintenance Effective maintenance drives: -Increased output with the same assets -Reduced need for capital replacement -Reduced maintenance cost per unit -Reduced total cost per unit -Improved performance (cost, productivity, and safety) -Increased competitiveness -Increased market share What is Asset Maintenance? Optimize Your Manufacturing Equipment with EAM

42 Record all work – PM and CM Collect all costs to the asset and task level Plan work Schedule work Improve PM program -Predictive / condition-based -Technology to detect potential failure -FMEA and RCM activities Empower resources Change culture Maintenance Best Practices Optimize Your Manufacturing Equipment with EAM

EAM and Equipment Optimization Optimize Your Manufacturing Equipment with EAM Indirect inventory processes Project controls Equipment efficiency Maintenance processes Indirect purchasing processes Utilize EAM to PM & CM Measure Analyze Improve 43

44 Equipment mapping to ERP Production line mapping to ERP New/improved reporting NEW in EAM v12.6 Maintenance Optimize Your Manufacturing Equipment with EAM

45 Supports MSW/PSW interface Another step towards production driven maintenance Equipment Mapping to ERP Optimize Your Manufacturing Equipment with EAM

46 Supports MSW/PSW interface Another step towards production driven maintenance Production Line Mapping to ERP Optimize Your Manufacturing Equipment with EAM

47 Incorporates “Transaction Date” ranges Retrofitted back to New/Improved Reporting Optimize Your Manufacturing Equipment with EAM

48 Conclusion and Next Steps Optimize Your Manufacturing Equipment with EAM

49 Think “Effective Enterprise” where all business processes are -aligned, -working at peak efficiency, and -delivering the strategic goals of the organization Specifically -Align EAM processes -Maximize EAM as a “single system” -Utilize EAM to measure results -Continuously improve How Do I Optimize Equipment? Optimize Your Manufacturing Equipment with EAM

EAM and Equipment Optimization Optimize Your Manufacturing Equipment with EAM Indirect inventory processes Project controls Equipment efficiency Maintenance processes Indirect purchasing processes Utilize EAM to Align indirect processes Work at peak efficiency Deliver on strategic goals 50

51 Stop by the Solutions Expo Schedule a demonstration Schedule free “EAM Operational Excellence Workshop” Register for “EAM v12 Making the Switch to.NET” class May 30 – 31 in Santa Barbara Next Steps Optimize Your Manufacturing Equipment with EAM

52 Questions & Answers Optimize Your Manufacturing Equipment with EAM Nancy Majure EAM Specialist, QAD Inc Kate Fenello EAM Product Manager

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