1. Welcome to today’s Webinar: Top Asset Lifecycle Management: Driving Profit in a Budget Constraint Environment
Please join us for the following upcoming Aberdeen Group Webinar:
August 19, 2010
Achieving Environment, Health and Safety (EH&S) in Today’s Plant

2. Daniel Konstantinovsky, Product Marketing Manager, ABB Mehul Shah,
Joining us today:
Daniel Konstantinovsky,
Product Marketing Manager,
ABB
Mehul Shah,
Research Analyst,
The Aberdeen Group
Paul Studebaker, CMRP, Editor in Chief, Plant Services Magazine

3. Daniel Konstantinovsky
Product Marketing Manager
ABB

4. Reliability Excellence Drives Best-in-Class Performance
May 20, Dan Konstantinovsky, ABB Reliability Services North America
Reliability Excellence Drives Best-in-Class Performance

5. Discrete Automation and Motion
How ABB is organized
Power Products
Power Systems
Discrete Automation and Motion
Low Voltage Products
Process Automation
Services
$11.2 billion
33,500 employees
$6.5 billion 16,000 employees
$5.4 billion 18,000 employees
$4.1 billion
19,000 employees
$7.8 billion 28,000 employees
$4.2 billion 12,500
employees
(pro-forma)
2009 revenues (US$; pro-forma figures for automation divisions)
Life cycle services, reliability services & consulting services
ABB’s portfolio covers:
Electricals, automation, controls and instrumentation for power generation and industrial processes
Power transmission
Distribution solutions
Low-voltage products
Robots and robot systems
ABB Confidential and Proprietary Information

6. What is Reliability? Definition
Meaningful definition:
Overall
Equipment
Effectiveness
Availability
Performance
Rate
Quality
Rate = X X
In other words, we tie $ directly
ABB Confidential and Proprietary Information

7. Why reliability? Operational Excellence is biggest profit contributor
Company Profit
Operational Excellence is biggest controllable contributor to sustainable profit.
Operational
Excellence
Reliability Excellence
Operational Excellence needs a reliable foundation:
People  Processes
Tools  Metrics
ABB Confidential and Proprietary Information

8. Influence of OEE on earning power
Planned
hours
The earning power of a
plant under
some assumptions:
8 760
Theoretical
prod/year
Actual
prod/year
Max prod/h
Contribution
margin/year 50
OEE
Prices in kUSD
65 755
60.0 %
Contribution
margin/unit
Profit
0.250
11 286
Availability
Price/unit
77.0%
0.600
Direct
maintenance
costs
Fixed
costs/year
Revenues
Profitability
Variable
cost/unit
Performance
9 469
54 469
7.15 %
ROCE
85.7%
0.416
Capital turn
over rate
6.81%
Depreciation
Fixed assets
Revenues
15 000
0.95
Quality yield
91.0%
Capital
employed
Other fixed costs
NOWC
30 000
15 781

9. Higher OEE substantially increases earning power
Planned
hours
OEE increase of
10% gives $9.3M
in increased profit
8 760
Theoretical
prod/year
Actual
prod/year
Max prod/h
Contribution
margin/year 50
OEE
Prices in kUSD
76 674
70.0 %
Contribution
margin/unit
Profit
0.250
20 633
Availability
Price/unit
83.0 %
0.600
Direct
maintenance
costs
Fixed
costs/year
Revenues
Profitability
Variable
cost/unit
Performance
11 041
56 041
11.21 %
ROCE
91.7 %
0.350
Capital turn
over rate
12.25 %
Depreciation
Fixed assets
Revenues
15 000
1.09
Quality yield
92.0 %
Capital
employed
Other fixed costs
NOWC
30 000
18 402

10. Same earning either requires price increase...
Planned
hours
Same earning power
can be achieved by a
6.2 % price increase...
8 760
Theoretical
prod/year
Actual
prod/year
Max prod/h
Contribution
margin/year 50
OEE
Prices in kUSD
75 486
60.0 %
Contribution
margin/unit
Profit
0.287
20 434
Availability
Price/unit
77.0 %
0.637
Direct
maintenance
costs
Fixed
costs/year
Revenues
Profitability
Variable
cost/unit
Performance
10 053
55 053
12.20 %
ROCE
85.7 %
0.350
Capital turn
over rate
12.25 %
Depreciation
Fixed assets
Revenues
15 000
1.00
Quality yield
91.0 %
Capital
employed
Other fixed costs
NOWC
30 000
16 754

11. ...or reduction in maintenance costs of 95%!
Planned
hours
… or by reduction
of maintenance costs
by >95 % !
8 760
Theoretical
prod/year
Actual
prod/year
Max prod/h
Contribution
margin/year
100
OEE
Prices in kUSD
65 755
60.0 %
Contribution
margin/unit
Profit
0.250
20 313
Availability
Price/unit
77.0 %
0.600
Direct
maintenance
costs
Fixed
costs/year
Revenues
Profitability
Variable
cost/unit
Performance
442
45 442
12.87 %
ROCE
85.7 %
0.350
Capital turn
over rate
12.25 %
Depreciation
Fixed assets
Revenues
15 000
0.95
Quality yield
91.0 %
Capital
employed
Other fixed costs
NOWC
30 000
15 781

12. Mehul Shah
Research Analyst
The Aberdeen Group

13. Mehul Shah Research Analyst
Asset Lifecycle Management: Driving Profit in a Budget Constraint Environment
May 20th, 2010
Mehul Shah Research Analyst

14. Agenda Introduction Research Methodology Survey Demographics
Making the Best-in-Class
P.A.C.E. (Pressures, Actions, Capabilities, Enablers)
Recommendation
Questions

15. Aberdeen Manufacturing Research At a Glance
Over 60,000 Newsletter Subscribers
Library of Research Topics – Over 200 published documents
2,500+ MFG Executives Surveyed in 2008
In-depth Manufacturing Research Calendar
Over 15,000 Report Downloads Yearly

16. A Few of Our (More Than 25) Advisors
President Global Supply Chain, Schwann Food Company
Vice President, Conagra
Vice President, General Dynamics
Vice President Global Supply Chain, Celgene Corporation
Vice President Continuous Improvement, La-Z-Boy
Vice President Supply Chain, Becton Dickson
The Research Advisory Council provides the Strategic Service Management Practice with ongoing guidance around research direction and topic selection on topics that address the most pressing issues facing Service Executives globally. Comprised of CSO’s and other senior service executives across multiple industry sectors, the council serves as an invaluable resource for end-user market validation.
Director Strategic Initiatives, Pfizer
Vice President, Ditch Witch

17. 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

18. Aberdeen’s Methodology End-User Investigation: PACE Framework
Pressures:
External and internal forces that impact an organization’s
market position, competitiveness, or business operations. P A
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. C
Enablers:
The key technology solutions required to support the
organization’s business practices. E

19. Aberdeen Maturity Class Framework
Best-in-Class
- Top 20%
Selected Performance Criteria (KPI)
Industry
Average
Total
Respondents:
Asset Downtime
OEE
- Middle 50%
Maintenance Cost Reductions
Maintenance Budget Change
Laggard
- Bottom 30%
Respondents are scored individually across KPI

20. Aberdeen Maturity Class Framework
Asset Downtime
OEE
Maintenance Cost Reductions
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?

21. ~ 145 Qualified Survey Respondents
Size:
31% Small (Rev. < $50 million)
33% Mid-size (Rev. $50 million ~ $500 million)
36% Large (Rev. > $500 million)
Headquarters:
60% North America
26% EMEA
13% Asia-PAC

22. Seniority Represented2% 7%
10%
11%
41% 6%
23%
CxO
Vice President
Senior Management
Director
Manager
Staff
Other

23. Decisions for Asset Lifecycle Management
Asset reliability and maintenance
81%
New asset procurement
65%
Spare parts management
64%
Asset repair / refurbish / overhaul
60%
Training and certification
52%
Asset commissioning
47%
Asset decommissioning
41%
Safety - Employee and Asset
36%
Environment and energy management
32% 0%
25%
50%
75%
100%
Survey Question: Please describe which of the following decisions you influence?

24. Industries Represented

25. Maturity of ALM Programs

26. Top Pressures driving companies to focus resources on asset management
Maximize Return on Assets
71%
Need to delay CAPEX in the current economic
43%
environment
Respond to aging infrastructure
24%
Regulatory Compliance
21%
Adhere to corporate sustainability Initiatives
20%
Minimize health and safety related incidents 8%
All Respondents
Respond to attrition in workforce 7% 0%
25%
50%
75%
100%

27. Defining Best-In-Class Performance
Definition of Maturity Class
Mean Class Performance
Best-in-Class: Top 20% of aggregate performance scorers
2% Asset Downtime
92% OEE (Overall Equipment Efficiency)
-14% Maintenance Cost Change
-8% Maintenance Budget Change
Industry Average: Middle 50%
of aggregate performance scorers
5% Asset Downtime
84% OEE (Overall Equipment Efficiency)
-3% Maintenance Cost Change
-1% Maintenance Budget Change
Laggard: Bottom 30% of aggregate performance scorers
17% Asset Downtime
68% OEE (Overall Equipment Efficiency)
4% Maintenance Cost Change
4% Maintenance Budget Change

28. Strategic Actions Improve visibility into complete asset lifecycle to
45%
improve decision making
Establish collaboration across functional
45%
departments
Synchronize asset performance with corporate
35%
performance objectives
Establish a risk based approach to be predictive
27%
towards asset management strategies
Equip operations and maintenance employees
24%
All Respondents
with real-time visibility into asset condition 0%
25%
50%

29. Competitive Framework – Process Capabilities
Best-in-Class
Average
Laggards
Process
Asset management decisions are based on a risk based approach
44%
34%
32%
Dynamically updated asset management processes across the enterprise as new best practices are developed.
38%
20%
Process established to understand the criticality of asset to determine the most effective maintenance approach
56%
24%
Source: Aberdeen Group, June 2009

30. Competitive Framework – Organization Management Capabilities
Best-in-Class
Average
Laggards
Organization
Executive ownership and sponsorship for asset management strategies across the enterprise
60%
53%
29%
Established cross-functional team to foster collaboration across production, maintenance, finance, engineering and corporate groups
44%
26%
14%
Established Centers of Excellence for capturing and promoting best practices for asset management across the enterprise
20%
Social networking tools used to drive collaboration among current as well as past employees
25%
17% 0%
Source: Aberdeen Group, June 2009

31. Competitive Framework – Knowledge Management Capabilities
Best-in-Class
Average
Laggards
Knowledge Management
Centralized knowledge warehouse to store asset data from different plants
44%
32%
19%
On-demand asset lifecycle information easily accessible by employees
40%
15%
Failure data is used to perform root cause analysis to understand the impact and the probability of equipment failures
36%
30%
Source: Aberdeen Group, June 2009

32. Asset Information Asset Location 91% Maintenance Schedule 73%
Spare Parts Inventory
64%
Asset value
61%
Asset Condition / Status
61%
Equipment Vendors
51%
Asset Utilization
47%
Asset Lifecycle Expectation
33%
All Respondents 0%
25%
50%
75%
100%

33. Competitive Framework – Performance Management Capabilities
Best-in-Class
Average
Laggards
Performance Management
Asset Performance metrics are linked to financial metrics
38%
34%
33%
Asset Performance can be compared across plants
Source: Aberdeen Group, June 2009

34. Key Performance Indictors (KPI)
Total Maintenance Cost
66%
81%
63%
MTBF
49%
44%
Revenue Growth
25%
Asset
63%
Reliability
59%
44%
Cost of Downtime
31%
56%
MTBR
38%
46%
Profitability
32%
38%
50%
ROA
LTA
34%
37% 0%
50%
100% 0%
50%
100%
Best-in-Class
Others

35. Energy and Carbon Management
Best-in-Class
Average
Laggards
Sustainability
Energy management integrated with the overall asset management strategy
33%
14%
Maintenance schedules and alerts are based on asset condition and energy efficiency
22%
10%
Carbon emission levels are regularly collected and monitored
53%
34%
29%

36. Criteria for Purchasing New Asset / Equipment
94%
75%
63%
50%
38%
25%
19%
22%
27%
34%
58%
78% 0%
20%
40%
60%
80%
100%
Asset
reliability
Cost of asset
maintenance
functionality
Availability of
spare parts
Energy
requirement
New product
Introduction
(NPI)
Learning
curve
Percentage of Respondents
Best-in-Class
Others

37. Competitive Framework – Technology Capabilities Enterprise Asset Management
EAM Adoption
EAM Integrated with ERP
n= 114
Source: Aberdeen Group, June 2009

38. Technology Enablers
n= 114
Source: Aberdeen Group, June 2009

39. Recommendation: Laggard to Average
Establish executive focus for asset management.
Break down departmental silos and establish cross-functional teams to enable collaboration.
Focus on understanding the criticality of assets based on past and current asset data.

40. Recommendation: Average to Best-in-Class
Improve visibility into complete asset lifecycle.
Consider energy requirements while making asset buying decisions.
Invest in an Enterprise Asset Management (EAM) system.

41. Recommendation: Best-in-Class
Synchronize asset performance to corporate performance.
Enable real-time visibility into asset conditions by investing in wireless solutions.
Establish Integration between EAM and ERP systems.

42. Thank You
Contact Information
Phone:

43. Daniel Konstantinovsky
Product Marketing Manager
ABB

44. ABB Reliability Services portfolio:
ABB uses reliability as a lever to increase OEE and drive best-in-class performance.
ABB Reliability Services portfolio:
Enterprise Asset Management Services
Reliability Consulting
ABB Full Service®
ABB Confidential and Proprietary Information

45. Enterprise Asset Management Services
Enterprise Asset Management (EAM) Services
EAM Implementation
EAM Hosting
Database Development
PM30®
Maximo Services
PM30Plus®
SAP Services
MaximoPlus® & Other
EAM Services help instill a reliable foundation and enable customers to get the most out of CMMS/EAM investments.
ABB Confidential and Proprietary Information

46. EAM Implementation results in Centocor, a division of Johnson & Johnson
Challenge: Develop a validated, integrated and paperless Computerized Maintenance Management System using SAP
Solution: SAP EAM Services
Customer quote: “The results of this partnership are world-class business processes and a complete systems solution that will deliver equipment reliability and cost savings to the business for years to come. But these are not the only signs of success. The partnership with ABB has left us with a workforce that now has the system and reliability engineering knowledge to take our program to the next level on our journey toward world-class reliability.” Felix Velez, Director of Maintenance Operations
Results: SAP-related savings that have paid for the $3.2 million investment in less than two years
ABB Confidential and Proprietary Information

47. Reliability Consulting provides a path to success
Total Plant Reliability®
People
Process
Tools/Methods
Measurement
Vision & Mission
Mtce. Work Mgmt.
Critical Equipment Ranking
Financial
Org. Structure
Failure Investigation
Basic PM
Mtce $ as % RAV
Roles & Responsibilities
Standardization
PdM/Cond. Monitoring
Internal Business Process
Teamwork
Materials Mgmt.
CMMS/Data Mgmt.
PM Compliance
Operator Driven Reliability
T/A or S/D Mgmt.
Life Cycle Costing
Learning & Growth
Multi-skilling
Contractor Mgmt.
Risk Based Inspection
Training Hrs/Emp.
Performance Mgmt.
Mgmt. of Change
Reliability Centered Mtce.
Customer
Education/Training
Design for Reliability
RAM Modeling
OEE
Empowerment
Asset Management
Prevention
Reliability Scorecard
Best Practice Working Partially Working Not Working/Absent
Reliability Consulting benchmarks customers to identify strengths, recognize improvement opportunities and deliver actionable roadmap
ABB Confidential and Proprietary Information

48. Major cost reduction at NA Southeast Chemical Plant
“Forming a partnership with ABB, we have achieved improved production performance and lower maintenance costs. Our results are a continuing and sustainable process that will pay lasting dividends.”
Maintenance Manager, Southeast Chemical Plant
ABB Confidential and Proprietary Information

49. ABB Full Service®
ABB Full Service® is a long-term maintenance collaboration in the form of a performance-based win/win partnership between ABB and the customer.
ABB assumes full responsibility of design, execution and management of client maintenance, including full responsibility of:
All maintenance personnel
All maintenance related activities
All maintenance equipment & facilities
Management of maintenance subcontractors
Management of spare parts and inventory
ABB Confidential and Proprietary Information

50. ABB Full Service® increases productivity and reduces costs at Compañía Mega S.A.
Year-over-year reduction in total maintenance costs by %
Increase of 12.6% for OEE in just the first year of the agreement
Maintained 99.6% availability
ABB Confidential and Proprietary Information

51. Interested in learning more?
Call:
Visit:
As a token of appreciation for attending this webcast, ABB will send you the latest issue of ABB Review, the esteemed global technical journal produced by ABB Research and Development. This issue features developments in the fields of maintenance and reliability.
Contact us today to get your copy.
ABB Confidential and Proprietary Information

52. © ABB Group
November 27, 2017 | Slide 52

53. Questions for our Panel?
Mehul Shah,
Research Analyst,
The Aberdeen Group
Daniel Konstantinovsky ,
Product Marketing Manager,
ABB
Webinar Sponsored by:

54. Thank you for attending today’s Webinar
Thank you for attending today’s Webinar! Look for an from us with a link to download the entire Presentation from today’s event.
Please join us for the following upcoming Aberdeen Group Webinar:
August 19, 2010
Achieving Environment, Health and Safety (EH&S) in Today’s Plant