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September 30, 2014

Typical Challenges in a Repair & Return Process - Part 2 ( Analysis)

Analysis & Probable Solution:

The conversation which is mentioned in the blog titled "Typical Challenges in a Repair & Return - Part 1" brings out some of the key issues which are pertinent to a repair & return process. In the following section I have attempted to classify the issues into categories and suggested possible solutions for them.

1) Avoid over stocking of high value parts by enabling tracking:  This has been a very common problem plaguing operations & inventory management. We all know that trying to keep optimum stock levels is the ultimate aim of an Inventory Manager. More often than not it so happens that once a part has been issued out to maintenance team personnel based on their work order material requirements it is considered as expensed . If such a parts happen to be a repairable part, then it becomes imperative for an organization to track these and ensure that if it goes faulty it comes back to inventory, goes through the repair-return process and is finally back on the shelf as available to use.  But if it does not come back to the inventory then it results in reordering of such parts again and again leading to unnecessary stocking of these parts and blocking valuable capital which could otherwise have been used somewhere else. 
          If there is a mechanism wherein one can track such repairable items/parts a little differently than the using a system it will definitely provide more visibility in the system. This could well be the first step towards solving such an issue.  Such parts can be differentiated from other normal parts by serializing them and having a special attribute in the item definition which distinguishes it from others.

2) Incentivizing returns:  How do I get the operations team to return back the item? If the technicians working on removing the faulty part fails to return or ship it back to the main warehouse the part will remain in the mini-warehouse forever. This seems to be the case in the above scenario as well. If there is provision to give the credit back to the cost center returning the faulty part it will definitely help improving the situation.  There are many options to do this using an asset management system. We can have a weekly reporting capability built in order to show the work orders which have drawn repairable items from inventory. This can be grouped by cost center and published to the cost center owners to show them the credit's they would receive if they return the faulty part to inventory. This will ensure that there is adequate pressure from the cost center managers down to the technicians to return the faulty parts to inventory.  This can be built in as a part of standard operating procedure as well for the technicians who execute the work orders.

3) Avoid showing items in repair cycle as available: Once the faulty part is returned to inventory and is back we have to make sure that such an item is not shown as available to issue. Many a times it happens that in when I look up for on-hand stock it shows up as available and I go to store to get it issued only to find that it is in the repair cycle and there are no items on shelf.  To facilitate this, provisions can be made in the inventory management system which show these items as in-stock but not ready to use. Most of the inventory management systems have provisions to have various statuses for on-hand stock .For example   RH- To indicate repair hold, Active - To indicate as ready to use, RV - To indicate repair at vendor site etc. 

4)Tracking items in repair cycle:   More often than not an item sent to the supplier for repair is easily forgotten by the inventory management team if they are not enabled to keep track of repairs.  In their day to day operations while managing Min-Max related requisitions it is difficult to isolate a single item which might have gone for repair unless there is an indication of the same. The other option is to ensure that such items are serialized in your inventory management system. Along with this use the on-hand stock statuses indicated above to clearly differentiate items out for repair at vendor site using a weekly report which is published to inventory management team. This helps continuous monitoring of such items and enables proper tracking.

5) Apportioning repair costs:  The issue related to apportioning the repair cost of an item is relatively an easy one to solve. It is a matter of ensuring that your operations team is made aware that the cost has to be borne by their cost center and informing the team managing the repair cycle to choose the correct operations cost center on repair requisitions. Once these 2 things are taken care of, the cost will get tracked appropriately. Of course buy in from operations management team is a prerequisite to this as well.

6) Proper reporting of assets in balance sheet: An item in the repair cycle is still an asset for the organization till the point it is declare as unfit for use and scrapped.  Hence it becomes an audit finding if the valuation of such parts are not shown in your balance sheet. To ensure that you correctly state your inventory value, having a provision to take back your repairable assets into your inventory first and then sending them across for the repair cycle becomes very important. 

In summary the Repair and Return process in an organization can be streamlined if we can adopt the following steps.
Step 1: Having an integrated Asset & Inventory management system with capabilities to track serialized items and producing operational reports to enable tracking for such items.
Step 2: Incentivizing returns by ensuring that the operations cost center gets back the credit on returning the faulty repairable items is the next step. This will also address the issue of including such parts in inventory valuation.
Step 3: Properly training the inventory management team to use appropriate cost centers for repair services.
Step 4: Ensuring that the items in repair cycle are not visible for other departments as available to use.

Typical Challenges in a Repair & Return Process - Part 1

Very recently I was a member of a project team implementing an Asset/Inventory Management system for a well-known pipeline maintenance company in North America. In the course of the implementation I had the opportunity to interact with the business leads managing both operations and inventory functions in the organization.  During these interactions I came across many process related issues like enabling material visibility across the organization, acknowledging service receipts, tracking material movement across warehouses, material reservation by work management teams etc.  But the challenges posed in one process area stood out amongst all these and that was the 'Repair & Return' process.

Through this 2-part blog I will attempt to highlight a few challenges pertaining to this process and possible solutions to the same. I have tried to bring out the issues in this process by using certain hypothetical characters playing various roles and the conversations between them.

Client Situation

ABC Corporation had been in the domain of pipeline maintenance, transporting crude oil from the exploration sites to the nearest port, for past 35 years.  The organization had a Work Management System in place which was used to schedule and execute their day to day maintenance work orders. The same system was also being used for procurement of materials and inventory management. Apart from these functions the other departments like HR, Payroll, Finance and Projects were using another ERP system. The project we were a part of was a means to consolidate the IT landscape into a single platform thereby avoiding a lot of interfaces and bring in efficiencies in the processes.

Repair and Return Process - Challenges

The Inventory Controller at ABC Corp. (who is responsible for Inventory Management across organization) had around 25 warehouses under her purview.  Out of these 3 were central warehouses which used to stock larger quantities of materials and the rest of them were expensed mini warehouses spread across various pump stations along the pipeline.  
  One of the most common concerns for any Inventory Controller is keeping a check on the inventory on-hand. At ABC Corp. also Mrs. Janet, the Inventory controller, was constantly keeping an eye on the value of stock held in inventory. During one of her routine quarterly stock analysis exercise she observed something unusual.  That whole quarter there was a steady increase in the month on month inventory valuation. That is when she called for a discussion with the three warehouse managers (Mr. Patrick, Mr. Joe & Mr. James) who were in charge of the central warehouses.  She told them about her observations about constantly increasing stock valuation. She also highlighted that she had ruled out increase of maintenance activity as a cause for this issue because she had discussed this issue at length with the Operations Director. He had categorically stated that there hasn't been any unusual increase in maintenance operations.  On further analysis she had found that the major contributor for this stock valuation had been certain high value nozzles which were repairable in nature.  When she tabled her analysis during the discussions the warehouse managers promptly responded.

"Yes, very true Janet" said Mr. Joe. "Those nozzles are very critical to our operations and we always get requests from the maintenance team to stock these. To avoid stock outs we try to order additional one or two quantities every time we go below our minimum."

Mrs. Janet tried to probe them further. "But if they are requesting for such items they will have cases of replacing an existing one which malfunctioned, isn't it?"

"That's true Janet" said Mr. Patrick. "Most of the times that is the case. They come with a Work Order Number and are always in a hurry to get the new part issued from the store."

"And the malfunctioned part which is replaced lies in the mini warehouse at the pump stations", added Mr. James.

Mrs. Janet was a little annoyed on hearing this. She could clearly see some of the issues which were coming out. She tried to continue the conversation to get some more details.

"James, isn't it very obvious that we can repair and reuse these costly items again and avoid unnecessary stock pile up?"

"Very true, Janet." James responded. "But looking from the maintenance team's perspective, what incentive do they have to get it back to the warehouse so that we can ship it for repair? Once these Items are issued out to them it is charged to their cost center", he added.

Mr. Joe pitched in again, "Moreover even if they return it, the repair cost is being borne by our cost center as we raise the request for repair services. Apart from these things, the malfunctioned items lying in the mini warehouses do not get valued in our inventory balances too."

"That's very true, Joe" remarked Mrs. Janet.  "We can't show them as available in stock because then someone will ask for it while the item is in the repair cycle. This thing is indeed a little more complicated than I thought. Can we try to come up with an actionable plan to tackle these issues?"

"Sure, we can" retorted all three warehouse managers.

In the next part of this blog I will try to analyze the problems presented through the above conversation and the possible solutions to it.

September 28, 2014

Automated Workforce Management - Part 2

In service industries, which are mainly dependent on their field force to execute the work, the key ask is to co-ordinate and manage the completion of high volume of work requests that are executed by the field force.  The requirement is to optimize the scheduling and mobility processes which along with the tightly integrated Enterprise Asset Management processes will automatically determine the most appropriate resource to carry out field works and dispatch work orders directly to the responsible engineer and allow for a two way communication flow between the engineers and office support team to provide a real time status update with minimum intervention from office management team.

In my last blog on Automated Workforce Management, I have identified the areas in a typical work and workforce management cycle where an automated solution can help in efficiently managing and controlling the work conducted at a remote location. But there are multiple business scenarios which could occur between work assignment to a field engineer and work completion. Some of the these typical scenarios are present in this blog.  

• Work Orders that does not requires planning (For eg: Preventive Maintenance and Condition Monitoring work orders) can automatically be sent to the scheduling application as soon they are generated. Based on certain parameters like - Priority, Location, Work Type, Skills needed, availability etc scheduling application recommends appropriate engineer/labor to the planner. Once Planner accepts the assignment the Enterprise Asset Management system assigns the work order to the field engineer.  A flexible automated solution can be designed to address the scenarios where a Scheduling application is not present or the Scheduling application is running in manual mode.

• Field engineer receives the work order on the Mobile device and he/she responds.  Field engineer rejects the work orders as he does not possess the right skills or he is sick/ not available. In both these cases the assignment status should be updated back in EAM and Scheduling systems. Scheduler/Planner has to assess the reason for rejection and take the appropriate action to modify the mappings in scheduling application and identify the new engineer for the work order.

• Once the field engineer accepts the assignment status should be updated back in EAM and Scheduling systems and the field engineer 's availability will be updated in the scheduling system.  There could be scenarios where the field engineer gets stuck in traffic or after reaching the work location he do not get access to the premises/asset. In such scenarios appropriate status has to be updated back in EAM and scheduling applications. Accordingly SLAs and availability of the engineer has to be modified. Customer/Asset Owner has to be notified.

• Once the field engineer gets access to the Asset/Location he/she will start the work execution. The work status should be updated back in EAM and Scheduling systems. There could be scenarios where the field engineer has to put the work on hold due to material unavailability, requirement of additional skills, bad weather etc. In such cases the work execution has to be extended beyond the SLA timelines  or to the next day. 

The status has to be updated back in EAM and scheduling applications along with the reason. Accordingly SLAs and availability of the engineer has to be modified. Customer/Asset Owner has to be notified. Requirement of additional skills is analysed, recommendation is taken from the scheduling application and work is assigned.

• Once the field engineer completes the work and post quality inspection gets the approval/ sign-off from the owner/customer he/she will complete the work order on the device and sends the appropriate status back to EAM and scheduling application.  There could scenarios where the Owner/Customer rejects the work post quality inspection or a Follow-up / related work order has to be raised. In the first scenario the appropriate status along with the reason for rejection is send back to EAM system. SLA and Engineer's availability are updated in EAM and Scheduling applications respectively. In the second scenario the work order is send back to the EAM system. It is analysed by the planner and post recommendation from the scheduling application it is assigned to the appropriate engineer.

By bringing the right level of automation to address similar scenarios one can bring the required level of efficiency by facilitating an increased number of self-delivered works through increased productivity of the in-house engineer/labor pool. It also help in increasing KPI compliances through more appropriate scheduling and reduced manual effort for management teams to co-ordinate and manage the work.

September 24, 2014

A Tryst with ERP Implementations

Gaining efficiencies, reducing maintenance cost, improving visibility across the company, reducing diverse IT system maintenance costs - these are some of the common reasons a company goes for an ERP implementation. Agreed, the reasons and the benefits are well thought out and the plan is all firmed up. But is it always a 'Bed of Roses'? I would say, not at all. Especially after my recent experience at a well-known oil pipeline company in North America. Immediately after the go-live we not only encountered a lot of unexpected issues especially in areas like reconciliation & document approval management, but also had to face a lot end user queries on how certain things are done in the new system. We did manage to bring the situation under control. But I would say that there were a few important lessons which I learnt from this experience which will stay with me for life. These include some of the good practices we followed which helped us and some of the improvement areas where we could have done better. The intent of this write up is to share the lessons from my experience so that it might be helpful for others embarking on a similar journey.

Business Commitment - Don't just talk, invest in it.

 First and foremost point that I would like to highlight is getting business commitment for an implementation. How often have we heard of ERP implementations failing just because of lack of consistent and continued business participation? I would say perhaps more than 50%. In spite of such statistics companies fail to engage business users throughout the implementation. Even if some companies manage to allocate a person, many a times it is someone who just joined the company or someone who might not be fully aware of the processes in that business function . Granted, that IT is not their focus and the resources hired have to focus on their core business and day to day operations. But if you are spending millions of dollars on an ERP implementation isn't it worth spending a few dollars on a full time senior business resources for 10-12 months? Personally I feel that it is worth spending this additional amount and the benefits are immense for both business as well as the project. I consider ourselves fortunate to have had such a support from business side which reduced the risk of failure to a great extent.

Training - Start Early - The earlier you start the lesser will be the resistance to change.

This is purely from a change management perspective. I would say that, in my implementation, even though we were fully aware of this aspect we weren't able to start early. Partly because of the fear of exposing half-baked solutions in front of a larger user community and confusing them As a business user, who is accustomed to using a system for performing tasks on a regular basis, it would be natural for me to feel some level of anxiety regarding the way things could change Will I have to spend more time figuring out how to do things, will I be able to learn the new system, and will it increase my burden? All these are very valid concerns. If we leave the training towards the end, say around a month before the new system is in place all the above mentioned points get amplified and the chances of resistance are much higher. Whereas if we start training at least a few selected change leaders in a business function at least 3-4 months in advance it takes off a lot of apprehensions and gives confidence not only to those selected few change leaders but also to the other employees in that business function or department. I agree that there are a few other risks too like negative publicity, but in my opinion if we compare the risks to rewards we will invariably come out with the conclusion that rewards often surpass the risks.

Data Migrations - Don't just look at Master Data, rehearse Cut Over's as well.

This is yet another area which can easily be lost in the midst of so many other things going on with the ERP implementation. We would have spent so many days working on the master data migrations in a particular function and tried to perfect it by having multiple rehearsals. What gets sidelined is the cutover data migration rehearsals. We often tend to think that cutover related activities can be looked at towards the end when the actual cutover is due. But then it becomes too late and we are left with too little time as the user acceptance testing activities and issue resolutions takes precedence. As the popular saying goes - 'A known enemy is better that an unknown ghost'. It is always better to experience and figure out the problems before doing the actual cutover. I would say having at least a couple of cutover rehearsals will ensure that there are minimal surprises. Again this does not entirely eliminate the probability of surprises. It at least minimizes them.

Even though there are many other aspects of a package implementation which needs adequate attention, I have picked up the above three areas as I thought that getting these right will avoid a lot mishaps in the later stages of the project. I would say that these three areas - getting business commitment, starting you training initiatives early and adequately rehearsing both the cutover as well as master data migrations , would be the top 3 things to pay attention to in an ERP implementation.

September 22, 2014

SAP - Concur deal : SCM Practioner's view

In order to acquire an unbeatable leadership position in the SaaS and Cloud based solutions SAP recently acquired Concur technology, a market leader in cloud based Travel and Expense management software.This 8 billion USD deal has several questions in the minds of several SCM practioners across the globe. My blog will try to address few of them.

With Concur's acquisition SAP will be strengthening its position on the cloud base ERP market which is different ball game then the traditional on premise ERP market. Though SAP is a leader in the on premise SAP market the cloud / SaaS ERP is different ball game altogether. Though SAP took a while before acquiring Ariba, a leader in the cloud based procurement solutions, it was quite swift in acquiring Fieldglass, 'cloud' based vendor management software specialized in temporary workforce management. The question is where in concur fits in. Ariba and Fieldglass are so far successful acquisitions for SAP and Concur will help SAP to help customers in T&E  space. Looking at the fitment, scope and potential of the product, some doubts have been raised on the price at which SAP clinched the deal. But as it happens with every deal, concur's acquisition is no exception as most of the deals are questioned either on the acquisition cost or the timing of the deal.

We can certainly say that SAP has taken a lead in positioning itself in this new 'ERP on cloud' scenario. Besides other advantages, cloud based ERP can help the online access to all the all the parties involved in the 'transaction' without specific integration needs. SAP expects revenues from on demand ERP to surpass on premise from 2020.

We can certainly say that Ariba, Fieldglass and now concur are part of the large jigsaw puzzle which SAP wants to solve in order to be an unquestionable leader in cloud based ERP solutions. I am sure there will be few more acquisitions especially in the mobile ERP space to solve this puzzle which will put SAP in lead position both in premise and cloud.

September 17, 2014

How Maximo can help optimizing the Pressure Pumping Services in Oil Field Services Organizations.


It is being observed that oil companies once rushed to get a well in the ground just to prevent their leases from expiring. Now that those leases have been established, these companies are now focusing on optimizing their operations so to extract the oil at competitive cost. In order to help these oil companies to maximize the gains from the existing oil fields, OFS (Oil Field Services) companies are offering the service mix called as IPM (Integrated Project Management). Analyst predicts that the OFS companies without the ability to deliver the IPM will go nowhere and will have to struggle for their existence. IPM helps the OFS organization to charge the fees for the expertise available within the organization. In near future most of the oil and gas exploration companies would be opting for IPM approach so that the specific expertise can be hired at the reasonable fees and the risk can be shared at affordable price. Thus making oil exploration more attractive and predictable.

Within IPM, Pressure pumping plays a key role .Pressure pumping services consist of cementing and stimulation services used in the completion of new oil and natural gas wells both onshore and offshore. Pressure pumping services play key role in optimizing the recovery of oil reserves and maintain optimal flow for producing wells.


According to MarketsandMarkets (, Global hydraulic fracturing market will grow to $64 billion by 2017. North America is expected to lead the global hydraulic fracturing production market. Currently North America leads the market with almost 90% of the market share. In North America the market is led by Halliburton, Schlumberger, Baker Hughes, Superior Well Services and Cud Energy Service.

Pumping machinery is very the critical component of the Pressure Pumping .Pumps are always subjected to wear, tear, erosion and corrosion and therefore can fail frequently. Therefore the correct operation, timely maintenance and lower downtime are very important to ensure uninterrupted services form these pumps. Unplanned failures can be avoided by timely inspection, follow up actions on observations of inspection and by planning periodical maintenance. Down time also can be reduced by adequate stock of general spare parts. Maintenance professionals have also noted that lack of preventive and timely maintenance or poor maintenance can further cause undue wear and tear of fast moving parts, and premature failure of the equipment. If not maintained properly pump can also result in increase in hydraulic and power losses and low efficiency. And finally inefficient running of the pump can increase the power cost. To support the preventive maintenance activities maintenance schedule also needs to be updated and revised based on the experience and analysis of failures and breakdown of the pumps. The preventive maintenance schedule shall mention the detailed steps to be carried out during the specific time intervals For example daily, monthly, quarterly, half yearly, annually etc. The PM schedule shall mention specific inspections and tests those can be performed at appropriate timespan.


Maximo can help optimize the operation by pulling these pumps in to the system as the assets along with their hierarchy and by defining the respective PM and job plans against each of these assets. These PMs can be invoked based on the usage or the duration. Maximo also offers the functionality wherein we can include the respective steps related to hazards and safety. Thus Maximo can help these pumps to be more effective and efficient


Thus by utilizing Maximo, Oil Field Services companies can improve the operating efficiency of the one of the key divisions within IPM. These savings generated can be passed on to the oil field companies.

Demand Signal Repository: Foundation for demand driven supply chain

Demand Driven Supply Chain: Characteristics & Benefits

Posted By: Supratik Ray, Principal Consultant, Manufacturing

Supply chains today are becoming more complex as companies today expand their geographical footprint and leverage outsourced manufacturing and operations. The consumers today on the other hand have multiple choice of fulfilling the demand due to increasingly similar product offering and penetration of multi-channel retail. The changes in supply complexity and demand variations are transforming the traditional forecast & push based supply chain to pull or demand driven. The key characteristics of a supply chain driven by demand driven:

1.     Material movement based on actual demand or consumption

2.     Real-time visibility of demand & supply across the chain.

3.     Single demand signal shared with all the tiers in the supply chain.

4.     Having inventory at right stage and right quantity at right.

The benefits of a supply chain driven by demand:

1.     Reduce or eliminate stock out situations

2.     Reduce safety stock and left overs / obsolescence.

3.     Reduce stock and inventory cost

4.     Improved promotions effectiveness

Demand Signal Repository: Foundation for demand driven supply chain.

One of the key enabler to a demand driven supply chain is removing information latency across partners of the supply chain and having single view of the supply and demand position. Demand signal repository (DSR) is the key enabler is getting a harmonized view of data from external and internal systems. DSR is an important building block of the demand driven supply chain and serves the following purpose.

1.     It is a central database for all demand.  It stores demand from all sources like point of sale data, store & distribution center inventory, retails forecasts & events.

2.     Harmonizes internal line of business data like sales, shipments and forecasts along with external data for analytics.

3.     Create a multi-dimensional analytic model using data from 3rd party sources like syndicated data, maps and other consumer information.

4.     Improve cross functional analytic tool to support business monitoring and pro-active decision making for supply issues.

The picture below illustrates the downstream data analysis and planning without DSR.

Image 1 DSR JPEG.jpg


The picture below illustrates real time supply chain with DSR.

Image 2 DSR JPEG.jpg

Demand Signal Repository: Benefits and challenges

The advantages of DSR driven demand driven supply chain:

1.     Improved forecast accuracy by having demand & supply position in a single repository and having a semi-real-time inputs for improving forecasting accuracy.

2.     Improved cash flow by reducing inventory. Right quantity and right place and right product phase.

3.     Improved promotional efficiency with integrated analytics for cross functional analysis of promotional spend & performance.

4.     Cycle time reduction for new product introduction due to availability of semi real-time data for sales across retail channels and consumer response to promotions.

The demand driven supply chain lots of benefit it also comes with its own set of challenges:

1.     Fragmented IT landscape across the supply chain and disparate usage of same data elements by different partners.

2.     Willingness of distributors and retailers in the supply chain to collaborate.

3.     Schedule adherence to share data to have a compete view of the demand and supply position.

4.     Executive sponsorship to adopt and demand driven as culture rather than tool or technology.


Industries like consumer goods which have typically shorter product launch schedule; strong regional channel preference and high demand variability have seen improvement in improvement in forecast accuracy and improved insights for new product introduction. Industries with long lead time or inventory at different stages are able to make better decisions on reducing supply chain inventory.

Though there are challenges in orchestrating a demand driven supply chain many industries are seeing the benefits and adopting DSR to achieve a demand driven supply chain. The proliferation of information technology across the tiers of supply chain, shortening product life cycles and multi-channel retail are going to increase the adoption by retailers and manufacturer.

September 15, 2014

Aspects of Shutdown Planning - Safety & Procurement

Safety: There may be many factors contributing to success of the shutdown and the most important is safety. As the safety performance is measured by the number of incidents/accidents, preparation is required to make it nil. So what type of preparation does it require? Identify a team which has experience in plant operations, handling hazardous material and occupational safety to prevent "grinding halt' issues. Team has to review the previous occurred incident/accident and identify the cause for the issue. Segregate the proposed list of activity as Ground work, working at height, Vessel entry and hot work. Do a pre-assessment on the activity that would be carried out and analyze the work area for any worker exposure risk. Safety team has to define the potential loss which is associated with hazards and present the need to eliminate the hazards to Shutdown team. If elimination is not possible detailed plan needs to be framed to deal with the hazards.

Procurement: After identifying the equipment, for the detailed task that would be executed determine the list of spare parts required. Segregate the identified spare parts based on their lead time. One which has highest lead time needs to be ordered first.
Procurement considers and involves a gamut of factors and activities to be done beforehand.
• Itemize the materials - Have a detailed listing of materials that would be required for carrying out the shutdown for the above identified tasks.
• If the required material is stock item then check if the sufficient quantity is available for the shutdown requirement.
• If the required material is of type non-stock then ensure that the material is available before taking the equipment for shutdown.
• Itemize the spares that need to be procured and these are generally classified as MRO (Maintenance, Repair and Operation) in manufacturing organizations.
• Hire/Rent any equipment (example a crane, etc.) that would be required carryout shutdown wherever applicable.
• Plan a hand over of excess materials, spares and return rental items appropriately.
• Ensure to mention the manufacturing/shipping dates appropriately by taking into consideration the lead times if not the project may run into delays.
• Communicate the requirement to 3PL /freight forwarding details like "date required", "date expected ready", "mode of transport", etc.
• Also, create a physical quarantine area to store incorrect or return materials.
• Have a standard procedure for any handling exceptional process and ensure that the personnel's are trained to handle any exception.
• Ensure that cycle counting and warranty activities managed appropriately so that there are no surprises at the end.

Execution and evaluation are the next phases in shutdown but it would not be a success if its initial phase planning is unsuccessful. A shutdown can be an overwhelming undertaking if managed as a single, stand-alone event. However, if the event is broken down into various phases with detailed, formal processes in each phase, it can be managed successfully each and every time.

Aspects of Shutdown Planning - Scoping, Kick-off & Identification

Plant Shutdown for a manufacturing or an energy company means a complete halt of operations which means the production lines are closed, hence no produce. But what does a plant shutdown mean to the maintenance function? Does plant shutdown mean that the maintenance operations also come to a halt? -No. On the contrary, plant shutdowns are planned to carry out maintenance and this activity is carried out in full swing. This needs to be carried out in a short time, as the production needs to be restored. To achieve this proper planning is required, as it takes production capacity off-line. Phases in shutdown planning can be broadly classified as PEP Planning, Execution and Post Execution.  This blog focuses on key factors to be considered through various phases of shutdown planning and execution that are put into use for effective plant shutdown.

Scoping: Shutdowns are not standalone and are of high impact on a cost front; hence the purpose of taking the plant to shutdown should be clearly known. To arrive at it, shutdown committee should be formed and the committee has to identify and appoint one person. This person's responsibility will be to collate the need for shutdown from across plant/department and present the scope to the committee. The scope should justify the need for shutdown, execution process, expected duration and health & safety measures that would be practiced. Note that the ultimate aim of shutdown should be to increase the Overall Equipment Efficiency and increase the Mean Time between Failures of critical equipment. Committee has to work around targeting the increase in OEE & MTBF. Any failure in shutdown would lead to negative business impact and show cases the execution strategy over a period of many years.

Kick-off: All the activities in the shutdown work around the execution dates. So, the activities should be scheduled in a manner in which all the parties involved should agree on the dates i.e., the team responsible (internal), the engineering team and the external contractor hired for this activity. All the main stakeholders have to determine and understand the scope of work that is required to be accomplished, the activities for pre-shutdown that are necessary, and the general logistics. Schedule is arrived after negotiation and all the stakeholders have to be informed to plan for the required resources. Miscommunication within the stakeholders can lead to shutdown failure. Hence proper communication between the stakeholders has to happen to know the status of progression of each stakeholder.

Identification: Once the schedule has been frozen determine the equipment's for shutdown. It is not that all the equipment can be brought down for service, but only the one's that are required can be serviced. Consider the below points to choose the right equipment
1. Does the equipment have a standby?
2. Can the internal team do the service/maintenance?
3. Does it directly impact the production?
If the answer to the above question is 'No' and it is 80% then the equipment can be considered for the shutdown activity. On identifying the equipment list down the activities to be performed on each equipment, identify owner/responsible for what and the order of execution. Order of execution should consider their complexity in bringing down the system and start up. As an example, we can consider food & beverage, pharma and most chemical manufacturing company's plant shutdowns, it is imperative to initiate systems that supply water for injection, then the one's that convert the supplied water to high-pressure steam and finally the one's that produce clean steam.

September 11, 2014

Planning for EAM Application Consolidation Program

Early millennium saw a burst in various IT applications addressing the needs of Enterprise Asset Management. Over the period it became a strategic application for asset intensive sectors like utilities, oil and gas, transportation etc. However back then, both IT infrastructure and the products were in nascent stage. Typical approach was to have a standalone environments for every site or business unit. Product offered limited functionality and usually there was a small local IT team to support the application. Over the decade IT infrastructure has evolved and so has the product capability. Keeping number of data centers limited and having centralize EAM solutions seems to be a natural choice now. Organizations with multiple standalone installations of EAM solutions are at the point of infliction and consolidations of these standalone instances is proving to be a logical path ahead.

Now that organizations are gearing up for the consolidation the major concern of the stakeholders is to achieve the targeted benefits and planning plays a crucial role in this journey. In this blog I am going to focus on various stages of planning for any EAM consolidation program.

There can be multiple reasons to consolidate. The most common are:

  • EAM products have matured and offer capability to provide harmonized solutions with site / business specific flavors
  • IT infrastructure have evolved and offer strong hardware platform as well as network connectivity
  • Central IT teams reduces operational overheads and provide better performance and data warehousing capabilities
  • Increase in operational efficiency of managing application
  • Consolidated versions offer scalability and ease of upgrade to future versions
  • End of life of existing applications

Whatever the reasons for the consolidation are, the first step is to plan. The complete planning process for the application consolidation can be divided into following:

A.Strategic Level (6 to 12 months planning horizon)

a. Vision: There needs to be a unified vision from IT and business side to go for the consolidation. Even though consolidation is beneficial for both, it may or may not be a mature idea for them at the same time. Efforts needs to be put in from leadership to bring these units together strategically so that consolidation can be planned well. Business benefits needed from the program should be planned ahead and strategic buy-in from all stakeholders should be achieved.

b. Partners: It is important to plan for internal and external partners in this journey. The journey is long and it is crucial to identify skillset needed at every stage. Plan needs to be prepared for orchestration of partners so that they bring in capabilities at right time and deliver what is expected.

c. Team: Core teams needs to be formed at this stage that can steer the program across various milestones

B. Tactical Level (3 to 6 months planning horizon)

a. Process harmonization: Consolidation can be achieved either by complete process harmonization or keeping the process decentralized or hybrid approach i.e. core process harmonization with local flavors. There is no specific formula for consolidation and depending upon the business goals that needs to be achieved, the core team needs to plan for the approach for consolidation. 

b. Consolidation approach: Whether to go ahead with big bang or sequentially go-lives needs to be planned during this stage. There are pros and cons associated with both and depending on the risks associated with it the team needs to come up with a road map.

c. Change Management:  With consolidation, the process may get harmonized across various sites. Planning for change management is very crucial so that there are no expectations mismatch when the consolidated environment goes live.

C. Operational Level (0 to 3 months planning horizon)

a. Operations team planning: Team should be planned and should typically comprise business owners for each functions, IT team members and program and project managers.

b. Project planning: Once set rolling, project planning needs to be prepared that should include, but not be limited to - requirement gathering, analysis, design, build, test, deploy and train. 

c. Infrastructure planning: Based on the strategic planning and benefits defined, the Infrastructure needs to be planned. The availability of IT infrastructure should be scheduled in such a way that there are no delays in the overall program

d. Support planning: Before the sites starts going live, the support planning should be completed. A dedicated team outside the project team should be planned in advance.

To sum it up, asset intensive organizations with multiple EAM application landscape are on the verge of initiating consolidation program. Planning forms the first step of any EAM consolidation program and it spans across the duration. Depending upon the lifecycle stage of the program, the planning requirements changes and success of the overall program depends on how well the plan has been prepared and followed at strategic, tactical and operational level. 

September 8, 2014

Crafting a Digital Enterprise using SMAC stack

Last week, one of our Senior VPs, Narry, also head of Hyderabad SEZ head, forwarded an invitation for a workshop on Digital Enterprise organized by HYSEA (Hyderabad Software Export Association on 6-Sep-2014. Narry is one of the past presidents of HYSEA. Workshop being planned for a Saturday, initially I thought of ignoring, but considering the topic's relevance on the whole community around us - living and nonliving things on this planet - I decided to register. And this was one of the best learning and stimulating experiences I have had in recent past.

Key Note was delivered by VSR (V. Srinivas Rao) - CEO of BT&BT Management Consultancy - VSR brings in superb knowledge of what is happening around the world in "Digital".  He delivered a short 30 mins session, and was full of facts and great knowledge sharing. VSR spoke on many things on how in future every living and non-living thing will have an IP address to communicate to each other and to us.

Machines do have IP address, and in future even trees, chairs etc would have IP address so that these can communicate about their problems to another machines, human etc. This actually gives life to every non-living thing, making the IT technology GOD. You may say I am exaggerating, but if you really look around today - we have driverless cars, drones, IOT, where every machine speaks - all made done by IT professionals like you and me. As Infosys new CEO Vishal Sikka says, Software is changing the world today. So, there is an element of Digital in everything around us, and today's Digital enterprises are built on SMAC technologies, which are reducing the human interventions slowly like mainframe technology moving to Client-Server, and further to Web Based. Keyboards moving to touch screens, and then to eye movement based inputs.

Next was a debate between VSR and IIIT Hyderabad' ( professor Vasudeva Varma. An interesting insight how what is happening in academic world, and how academic research shapes industry. Prof Vasudeva mentioned how some of the flipcart development was done by IIIT campus.

Though the academic research may not necessarily have a business outcome defined, but it certainly impacts the industry. MIT and other institutes are playing an important role in this regard. Today, IIIT Hyderabad is housing 65 startups. I firmly believe that future of Indian IT industry lies in startups. India's Global Delivery model would lose its charm, in its existing form, slowly due to multiple factors - technology and domain becoming more prominent compared to labor arbitrage, high wages in India, tougher Visa rules etc. I guess, future of this industry lies in innovation, design thinking, intelligent way of working, rather than a FTE based model.

Next on the agenda was a big debate "Applications Vs APPs". This was moderated by Sriram Papani (a SVP from TechM) and speakers were Manoj Devireddy (SVP - OSI) & Kalyan Chakravarthy (from Smart Crowd online services) speaking for Applications. Ramachandran Iyer (VP- Motivity Labs) and Sirish Puppal (Product Manager - Polycom) spoke for APP. Sriram started debate with he giving an example of his discussion with Anand Mahindra about Mahindra Group's satisfaction with SAP.

An interesting debate where audience also participated. Multiple discussion points on how Applications are backbone and critical to businesses for day-to-day operations, and how end-users like APPs and not complex navigation of applications. In the end, the consensus was that Applications and APPs have to co-exist for best business outcome. Interesting insight in middle of the discussion was when the application team was to give an example of an ERP on cloud, and moderator pitched-in with name of Ramco. It made me feel proud to have an Indian product being mentioned among all international software products. Ramco being the first application I worked on during my first job, and later on me being part of Ramco' product development team, made me feel nostalgic as well.

Last part of the workshop was a Tutorial where speakers talked about how Social, Mobility and Analytics are touching our day-to-day life. The most interesting and inspiring to me was the talk by a young entrepreneur Ayyappa Nagubandi on Mobility. Ayyappa heads a startup Possibillion and has. Ayyappa is also a regular columnist in Hindu newspaper. Ayyapapa talked about many small organizations are providing cutting edge solutions faster and cheaper. He cited examples of (get a loan in 60 seconds), etc. Most amazing discussion point was having partition using VMWare on mobile devices to having secured applications.

To me, it was a totally different kind of experience, which took me away from my regular thinking, working and learn something new which is shaping our world. As our new CEO Vishal Sikka says "software is changing the world".



September 5, 2014

Asset Management and Dynamic Work Plan-II

There are two aspects of this requirement presented in the scenario; one is the creation of a generic Work Plan while other focuses on making the generic work plan more specific. While Ramkumar Govindaraj, through the MoC fundamentals shares his view on how a change to an Asset and its related Work plan can be organized, I will talk about how we can tailor the "generic plan" to be more "specific"

Ramkumar Govindaraj

A change however minor should not be considered as trivial. Assets are capital intensive and require special attention and paramount focus to maintain them in good operating condition. A modification to an Asset needs to be properly reviewed and evaluated from technical and safety perspective. Proper care needs to be taken to ensure that the intended change meets the guidelines and design standards and does not pose any challenge to Health and Environment

Organizations have established protocols and have been following guidelines to validate changes. In the previous blog Rejeesh had briefed about the modification that was planned to overcome the frequent oil leakage problem in Gear box. In this scenario we saw that the supervisor analyzed the failures and identified root cause to come up with a recommendation to change the oil to a different specification and different type of oil seal. So, are we all set to implement the change then? One would say that the recommendation from an expert warrants the implementation, really?

The impact of change was not evaluated from its design and safety point of view. Here the recommendation required a change of design; something that could possibility impact other departments or functions if not properly evaluated and reviewed. The remedial actions proposed in this scenario classified as an Engineering Change and required a Management of Change (MOC) process. Such changes should not be implemented considering individual or a department recommendation though it may be an expert opinion. It needs careful evaluation and analysis. MOC help to adhere to this process. In MOC process a cross functional team is involved and the proposed change is subjected to justification and validation among different stakeholders and proposed solution is finalized and agreed upon with collaboration. The recommendation and action items of approved MOC will have a department or personnel accountable with a specified timeline for execution.

Here in our scenario, the work plan getting modified as an outcome of MOC recommendation would essentially include special instructions for the operating conditions, the resources which meet the length and breadth of operating conditions, be it the temperature(in our scenario), the materials being handled, operational hours etc. giving it a generic flavor. The plan is a one source stop for particular maintenance/failures related to an Asset; the question is how to make this generic plan more specific?

Rejeesh Gopalan

The selection of applicable work plan for an asset is dependent on its operating conditions; in our case it is the high temperature. These factors could be anything like extended operation duration, work mandating usage of special tools, particular skill set with additional qualifications etc. They definitely require special and different treatment, so should we go ahead and create a separate plan for each of them? But before that, imagine how difficult such maintenance planning would get!

With Robust CMMS packages around we surely deserve a simple program which could help the planner to filter out a specific plan/ resources from a more generic work plan based on operational parameters. While the generic plan covers the length and breadth of possible work details, it should also contain filter criteria for the resources as applicable. Such a plan essentially would allow planners to set an "if-else" condition and tag it to resources, be it the materials used for the service, a skill working on the plan or a tool required to perform the work.  Based on the values (selection criteria) fed as per the work details, it would then filter out all the resources matching the values.  As  per our scenario, let's say there are two oil grades SAE 90 and SAE60 meant for loaders which operate in the slag pit and the scrap unit respectively, both existing as part of a work plan and having these resources tagged appropriately against their operating temperature or the units they operate under. When such a work plan gets applied to a Slag unit work order the SAE 90 oil grade gets selected by default and the SAE60 gets left out. This way we will be able to create a template; a structure supporting dynamism and scalability

Work management is going through a phase of continuous change; remember the revolution I spoke about? Therefore I would like to keep this chain live and invite more views, critical assessments etc., a Part 3 maybe...


Asset Management and Dynamic Work Plan-I

My early days as a heavy equipment engineer saw a transition phase marking a shift in the organization from a pure manual maintenance approach to a Computer based Maintenance Management System (CMMS). The growing popularity of CMMS at that time and the organization's experience in ERP for managing its steel manufacturing were enough reason for the management to think on investing in a system to streamline their Maintenance operation in their Heavy Equipment division. To start with, the SMEs were required to identify the must have features in their respective areas. This listed feature was also referred to as the "Wish list". This helped the management to make a decision on procuring the right system fitting the bill.  The business case presented to the Management was that of a "Revolution" which was going to transform the mundane Maintenance process. 

The early results we saw were indeed fascinating; the automation which the CMMS brought seemed to be a true success story across departments it got implemented thereby winning all hands down. When the initial excitement subsided, the concerns started surfacing. What got extrapolated as a fairy tale story bringing wonders to the Maintenance process, soon started showing its shortcomings in addressing our process requirements.  Looking back at some of the items in the "wish list", we realized that they were just a wish which were never got fulfilled or addressed to its fullest potential. The fix we were in - How to question the package capabilities, something which is deemed to be supporting an optimal mix of best maintenance practices? Moreover, questioning the "best of best" would invite more questions about our processes. The solution- Simple, stop complaining, we will have to live with it! 

I still carry the wish list. Having seen multiple ERPs and its respective EAM modules, I juxtapose my list with the feature any leading EAM packages offer; in a hope to map these features in some form or other. With a series of blog I am planning to discuss one such feature per blog to get your perspective/story .To start with, I am putting forward my first in the wish list- A dynamic Work Plan, here it goes..

To understand and appreciate this requirement better, I would like to take you through a case, a day in life of Bala, our maintenance supervisor in the steel plant. The maintenance department services in all 20 tracks mounted loaders, each working in different location of the steel plant like the facility expansion site, scrap/iron ore unloading site, Slag pit, Jetty etc. The Asset though same demanded different maintenance treatment in terms of resources and safety compliance depending upon where they operated. One day, Bala gets a message regarding a gear box-oil leakage failure for a track mounted loader operating in the slag pit area; a section where molten slag gets collected. Slag pit is critical site and any failures are taken up on priority. Bala has the responsibility of fixing up this leakage; something which is not so straight forward. He surely needs to pull up a work plan template to guide him with the resourcing. On searching the repository for gear failures, he comes across one related to the Oil leakage. Just when he is about to go ahead with this plan, it strikes to him that there had been a similar series of breakdown which happened in the slag pit area. He recollects the discussion with Mr. Patel, the SoS (Sequential Oil Sampling) expert talking about the Oil in the gear box needing to be more viscous having higher boiling temperatures so that they do not vaporize or become thin to escape the oil seals.

The plan which Bala worked for this oil leakage however did not include the change in the oil specification as there was a single plan for the entire Asset family of track mounted loaders. The decision in this case had to be made to be made quickly; slag would get solidified quickly making the transporting process difficult. Time was running out for Bala and further adding to his woes, all the spare loaders have been lent out to the scrap unit, to load and unload the metal scrap. He needed to repair the fault very soon. The oil seal supporting the new grade of oil was also different .Bala also had to browse through the list of Crew members certified to work in the Slag Pit area, this being an onsite failure. Being a champ and backed by his strong experience, he was able to make these manual inclusions to the plan and pull this off just in time. This is a moment of realization making  one think - is this model really sustainable!
What we witnessed here is that the basic purpose of a template based work got defeated as Bala treads though the plan resource by resource, contemplating on the best mix. I would like to invite your ideas/ views on how such solution can be implemented. I will also present my view on how I think a CMMS package could have effectively handled this, in the Part 2 of this blog.

September 2, 2014

Contract Assessment and its dependency on solution implementation !

The importance, awareness and complexity of streamlined contract management processes have been increased over the last few years. Many organizations have started moving to automate their contract management processes to streamline their intra organizational and vendor collaborations. Best-in-Class organizations are those who have established the "paperless contract" approach for managing procurement contracts.

Once an organization decides to implement contract management solution, the next step is to start with assessing leading market solutions and select the best one depending on its various parameters, features and capabilities of the solution. But how do you ensure whether the features you are going for will be really used or needed, to build in-house contract management system or whether contracting processes defined in the organization can be addressed by the selected solution, what could be the gaps, if any and what if solution cannot meet key requirements within contracting & procurement business processes???

During my consulting experience, I came across such situation where customer selected the solution upfront based on few parameters and later on realized the capabilities or limitations where the key requirements within organization were difficult to address within selected solution. Here we are not going to talk about the solution, instead we will focus on the key INTERMEDIATE step "Assessment" before selecting or implementing solution to address contracting business process and key requirements. Here Assessment refers to both As Is business process as well as existing sample contracts reviews.

Following could be typical activities of assessment phase:

    • Assess existing "As-Is" contract management process
    • Review subset of contracts for each unique type within the organization, as applicable
    • Identify business process gaps and suggest recommendations
    • Standardize the proposed "To-Be" process and get buy-in from business stakeholders
    • Define the metadata for the proposed contract management system
    • Identify criteria for categorizing  the legacy contracts and document categorization
    • Understand master data setup and system interface requirements
    • Develop strategy for Contract Conversion process and building contract management system

Once all above activities completed, you are already done with building skeleton of the actual contract management implementation. The most important part is documentation of business process and categorization of the contracts within organization. This will help you to design various metadata, contract templates you need to define and the standard clauses required within each template, which is the heart of any contract management tool. Now as you understood the business process, other high level requirements around contract authoring, approval workflows, contracts execution, obligation management and security access levels are documented, depending on how simple or complex these requirements are and whether proposed solution(s) can address all the key requirements as part of deliverables generated from assessment phase, it will ensure right selection of the technology solution and successful implementation of the contract management system.

September 1, 2014

Digitization in Enterprise Asset Management

I have seen Asset Management practice transform a great deal since the time I was first inducted into this domain. From a black board charting the overall equipment status and files holding hundreds of thousands of documents maintaining equipment logs, we have indeed come a long way to have a full-fledged computer systems for our Asset management needs. I may sound like an old school, but actually I have seen this transformation happening within a very short span. Must say that the change has been overwhelming, even better is the rate at which this is continuing to happen. I take a closer look and it seems as if this evolution has been conspiring for a development or should I say a gradual move towards a Digitized framework. I believe that this is not just another technological phenomenon but has something to do with the inherent changes the Asset Management function by itself has been going through lately. Through this blog, I would like to discuss few of these changes which I think has reinforced this digital trajectory in Asset Management.

Traditional asset management v/s the contemporary
Traditionally Asset Management operated in confines of a central Maintenance department. Since the time an Asset was put into operations until it was salvaged or deemed to be discontinued, they were pretty much tagged along departmental boundary. Containing key Asset information such as historical maintenance Logs, Equipment manuals, purchase and registration Information, warranty and lease details etc. which typically existed in an analog forms, in a way met the requirements in a standalone Maintenance scenario. But now, look around and you would see that Asset Management as a practice is increasingly becoming a shared service, shared across multiple departments and sometime across the enterprise boundaries. Asset as an entity has overlap with multiple department within the Organization, be it the purchasing department dealing with the procurement of Asset and its Spares and have responsibilities of tracking critical information on tracking Warranty and Lease information or a safety department retaining critical safety related information such as clearances, permits and certifications. While these departments are not directly involved in the Maintenance functions, they are dependent on it to provide them with the information on Assets on a timely manner to operate their functions more effectively. As Asset Management function leaped the confines of the Maintenance department, it became essential to enable information sharing with external departments. Digitization of Asset Management came as a savior here. It enabled easy capturing and archival of key Asset information such as historical maintenance records, work logs, technical bulletins, safety rule books, the manuals etc. to a format enabling easy storage. Not only this, it also enabling the publishing of information packages which could be exchanged seamless and used by the stake holders as and when they needed it.

Supporting Next- Gen Asset Management through data portability and Smart Infrastructure
Equipment's are getting smarter, even our ever smart Maintenance folks are now equipped with smart devices which helps them to perform their not so easy day to day EAM functions in an effective manner. Digitization thrives on these developments to enable a successful knit of Maintenance functions and these intelligent systems. . Instrumentation controls intertwined within an Assets helps in relaying meaningful Information on Asset performance and health. These information have now become essential in channelizing the Maintenance programs and in some cases cut down on unwanted routine checks and maintenance operations thereby helping in a leaner Asset management functions. Data portability had been an issue within the Asset management space, it would have been a toiling exercise to carry an Asset manual to the repair location for decipher a complex hydraulic oil flow directions. With Digitization, the situation is much easier to manage now with the information within a handheld device, enter marking if needed, as compared to referring an illegible oil drenched manual. As Asset Management witness this new age, it is hard to ignore the much spoken about Asset Management practices such as Predictive and Prescriptive Maintenance. Digitization here helps, for example in converting the signals or distress signs from an Assets into comprehensible messages or indicators of an imminent failure, thus enabling a faster identification and resolution of faults. For enterprise engaging a third party expert for managing their Assets or scenarios involving vendors managing their equipment fleet deployed at Customer facility, the entire Asset Management experience can be enriched a great deal using a digitized maintenance management framework. Real time remote monitoring which has been enabled by virtue of Digitization of Asset information will give Asset Managers a comprehensive of their Asset base. Be it Assets operating in far off sites within the organization or across, the key Asset operational and history information is just a click away.

Though digital asset management may seem like a technological advancement, it is essentially a catalyst to catapult the fast evolving maintenance practice across industries. According to me, the digitization in Asset Management has a strong potential to contribute towards the revival of the domain. However, it is important to understand how Digitization can help to address your organization specific Asset Management needs. This understanding has to be in place before embarking on this journey of Digitization and building any hopes around experiencing a related transformation and a positive contribution towards the Asset Management function.

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