System simplificationthrough integration

Accessing real value through CMMS

Core modules
For companies that view maintenance management as critical to achieving their business objectives, some of the biggest pieces of the puzzle are the core CMMS modules. These include the standard maintenance modules such as equipment history, work order control, preventive maintenance, inventory control, and scheduling. Some CMMS vendors have added more sophisticated maintenance modules including project management, reliability-centred
maintenance, and safety and compliance.

But the real potential lies in adding company-wide functionality to the core, such as company-wide cost ledgers, budgeting, contract management, procurement, and invoice processing. Sharing the same costing and procurement application with operations allows you to track all the costs associated with producing a product more accurately, and on a more timely basis.

Instead of waiting until the end of the month when data from poorly integrated traditional systems is consolidated, reconciled and reported, a fully integrated CMMS provides a simple process for extracting accurate cost data for any user at any time.

An example illustrates some of the issues and opportunities in integrating core modules. Suppose a maintenance planner completes a CMMS-based purchase requisition for a new part found in an original equipment manufacturer's catalogue with a list price of $465.00 and a lead time of four weeks. The purchasing agent then phones around for quotes and finds an equivalent part from a different supplier for $330.00 and lead time of six weeks.

If the procurement application is not one of the core modules of the CMMS, the CMMS still thinks it is waiting to receive a $465 part from the original equipment manufacturer in four weeks. A paper copy of the purchase order from purchasing goes to maintenance in order to notify the receiver, originator, and stockkeeper as to what was actually ordered. The CMMS database must then be updated manually, if it can accommodate the data at all. This is a painfully slow process, prone to errors that leaves users frustrated. But let's dig deeper.

When the part is received, suppose it is damaged, or late, or not quite equivalent to what was ordered. By recording this data on the procurement system used by operations, the maintenance department would not be able to access the information via the CMMS unless it was re-keyed into the CMMS, if possible. Furthermore, when the invoice arrives and the head office-based accounts payable department discovers a discrepancy in what was ordered, received, and invoiced; how does the local CMMS get updated with the true cost of the part?

Trying to integrate two or more separate systems together can be problematic. In a given multi-site corporation there may be many maintenance, manufacturing, procurement, and accounting systems. It is possible that each system has distinct master files, with unique field names, sizes, and types. When trying to consolidate data or move data from one system to another, the various database structures can be prohibitive.

One of the most powerful tools used to simplify processes is workflow. This feature automatically routes documents to approvers and planners, based on user-defined rules.

Accounting and finance
In order to avoid double entry and then reconciliation of multiple sources of the same data, the core CMMS modules should be integrated with payroll, fixed asset accounting, accounts receivable, and general ledger modules seamlessly.

Payroll--Many companies use time clocks to log entry and exit of personnel for payroll purposes. They may also use time cards to log time against work orders and activities. A properly integrated system has a single source of data for both purposes, collected manually or using electronic data entry--for example, swiping barcode badges.

Fixed asset accounting--There can be a lot of overlap between the equipment master file of a CMMS and a typical fixed asset accounting module. Here too, data should be collected once and shared between the two applications to ensure the information is consistent.

Accounts receivable--Sometimes the maintenance department is asked to perform work that can be charged to a third party. Chargebacks or third-party billing as it is called, can be flowed through the accounts receivable module of an integrated accounting system.

General ledger--Although this is one of the most common interfaces for the core modules, it is surprisingly inadequate for managing costs.

The general ledger is a batch-based system that sits on top of the cost ledgers. It summarizes costs for financial reporting purposes, but does little for maintenance and operations in identifying work simplification opportunities. Activity-based costing, on the other hand, helps identify non-value-added activities and opportunities for automation.

Operations
The goal of the maintenance department is to maximize the availability of assets owned by operations, at minimum cost. This suggests enormous value in tightly integrating the CMMS core modules with key systems managed by operations, such as materials requirements planning and shop-floor data collection systems described below.

Materials requirements planning--By coordinating the scheduling of equipment downtime on the CMMS and the materials requirements planning system, operations and maintenance can work from a consolidated plan for
long-term capacity planning, major shutdowns and short-term scheduling. Another key point of integration
between the two departments is tracking equipment costs by combined statistics such as cost per ton produced, cost per kilowatt - hour, and so on.

But the real potential lies in adding company-wide functionality to the core, such as company-wide cost ledgers, budgeting, contract management, procurement, and invoice processing.

Human resources
Personnel information includes tombstone data--for example, name, date of hire, address--vacation schedule, overtime record, skills and competency inventory, training, pay rate, discipline record, and absenteeism record. The information should be recorded once as close to source as possible, for both the CMMS and the human resources system.

Data and image management tools
Maintenance managers are demanding access to all kinds of data, images, and documents. A modern CMMS allows inputting and even editing of CAD drawings, scanned images and documents, data sent via the Internet, and so on. In turn, these can be attached to work orders, equipment records, the parts catalogue, and other areas within the CMMS.

One of the most powerful tools used to simplify processes is workflow. This feature automatically routes documents to approvers and planners, based on user-defined rules.

Reporting and analysis tools
Even the most simplistic CMMS packages have integrated report, form, and graphics generators to extract data. For a transaction-based, mission-critical system running twenty-four hours a day, seven days a week, a data warehouse can be used to store successive snap-shots of the data at user-defined intervals. The data is then available off-line for reporting and analysis purposes. For example, engineers need data for performance analysis, and accountants want cost data.

Superior analysis capability
using data drawn from a wide spectrum of fully integrated systems enables management to make better decisions, like determining when to repair or replace equipment, catching repetitive problems, predicting failures for triggering preventive maintenance, or optimizing inventory service levels. Thus better analysis tools yield greater opportunity for work simplification.