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Developing a repair program under budget restrictions
with SAP Asset Budget Control
Evgeny Sudakov
SAP
4
Contents
1
2
3
Major prerequisites and requirements
Business process planning overview
Implementation
Performance
Major prerequisites and tasks
SAP ERP PM
Meridium
SAP ABC (Asset Budget Control)
Infinite Insight
■ Available repair budget is smaller than the total cost of repair tasks
■ Repair tasks ranking and repair program volume reduction are
conducted manually based on expert analysis
■ Developing a repair program based on:
- Budget restrictions
- Technical condition of equipment
- Repair costs analysis
- Manufacturing losses analysis
Major prerequisites
Major tasks and results
Implementation tools
Major requirements
Planning and asset management should be integrated with corporate and business
planning, budget management and reporting
An organization‘s decision-making processes based on risk evaluation can become
more efficient if assets-related risks are considered in conjunction with financial risks
and balance between costs and risks is found.
Development and approval of asset management plans is an interactive process which
includes bringing plans in line with the organization's financial capacities.
Resources analysis is conducted to coordinate the available budgets with funds being
earmarked and can identify that resources are insufficient to accomplish all of the
suggested asset management activities. In this case an iterative process of
coordination of the suggested activities with the available resources should be
implemented. Criteria and processes for asset management activities ranking should
be defined.
The organization should define the risk evaluation criteria under its asset management
system's decision-making process in order to manage risks within the asset
management system. A risk matrix can be implemented as part of this process
ISO 55002:2014
ISO 55001 manual
4
Contents
1
3
Major prerequisites and requirements
Business process planning overview
Implementation
Performance
2
Budget adoption*
Planning for 1+ years
Planning works based on condition analysis and
statistics
Preliminary yearly work schedule plan
Works ranking and adjustment
Calculating preliminary work schedule plan
Material requirements evaluation
Budgetary control
Calculating target prices for materials and services
Calculating target work rates
Workload evaluation
Yearly work schedule plan Work schedule plan review
and approval
Planning works based on regulations
Personnel management services
Company management services
Maintenance and repair services
Financial and economic services
Material and technical procurement services
Headcount evaluation
Target costs evaluation
Budget adjustment*
Planning for a month or quarter
Works based on technical condition
Preliminary monthly work schedule plan
Works ranking and adjustment
Calculating preliminary work schedule plan
Material requirements planning
Budgetary control
Calculating target prices for materials and services
Calculating target work rates
Workload analysis and personnel planning
Monthly work schedule plan
Work schedule plan review and approval
Works from the yearly work schedule plan
Personnel management services
Company management services
Maintenance and repair services
Financial and economic services
Material and technical procurement services
Headcount evaluation
Target costs calculation
SAP Asset Budget Control
Works based on technical
condition and risks
Maintenance and repair
regulations
Preliminary work
schedule plan Work schedule plan
Cost criticality index
Equipment technical condition criticality index
0.2
(very good)
0.4
(good)
0.6
(normal)
0,8
(bad)
1
(very bad)
1
(over 5.0 mln $) 0.2 0.4 0.6 0.8 1
0.8
(from 3.0 to 5.0 mln $) 0.16 0.32 0.48 0.64 0.8
0.6
(from 1.5 to 5.0 mln $) 0.12 0.24 0.36 0.48 0.6
0.4
(from 0.5 to 1.5 mln $) 0.08 0.16 0.24 0.32 0.4
0.2
(from 0.1 to 0.5 mln $) 0.04 0.08 0.12 0.16 0.2
Ranking based on
equipment and works
Budget restrictions
Statistically anticipated works
SAP Asset Budget Control
SAP Predictive Analytics
Meridium
Versioning
Preliminary yearly work
schedule plan Yearly work
schedule plan
Preliminary quarterly/monthly
work schedule plan Quarterly/monthly work
schedule plan
1 2 3 4
Orders for the year that have
passed an equipment and
works criticality-based
budgetary control
Orders for the year created
as per the regulations, failure
statistics and technical
condition analysis
Orders for the quarter/month
from the yearly schedule
plan + unplanned orders
Orders for the quarter/month
that have passed an
equipment and works
criticality-based budgetary
control
Orders to execute Planned orders
4
Contents
1
2
Major prerequisites and requirements
Planning business process overview
Implementation
Performance
3
Equipment criticality index
■ SAP ERP + Meridium
■ Expert analysis
Sources of information
■ Technological criticality
■ Technical condition index
■ Repair costs
■ Manufacturing losses
■ Environmental costs
■ Other costs
Criticality index components
Equipment criticality index definition*
Purpose and usage
■ Defines an equipment technical condition level with due regard for production and repair costs risks
■ Calculated for equipment included in design and preparation works repair schedules
■ Used for planning equipment repair and maintenance under restricted budget
*Without using Meridium
Costs and losses
criticality index C Technological
criticality index B Equipment
criticality index А = x
Technological criticality index calculation (example)*
V – parameter estimate
W – parameter weight
= Technological criticality index
Wi x Vi
Wi x Vmax
Technological Number of months since last repair Standby or not Vibration Oil temperature
W1 (Weight) = 5 W2 (Weight) = 1 W3 (Weight) = 3 W4 (Weight) = 2 W5 (Weight) = 2
B
Equipment performance figures (example)
Index calculation
1 Other
3 Support.
5 Main
1 1–6 months
2 7–12 months
3 > 12 months
1 Backup
5 Non-backup
1 < 70 um
2 70–90 um
3 > 90 um
1 < 95 °C
2 95–110 °C
3 > 110 °C
V1 V2 V3 V4 V5
Costs and losses criticality index calculation (example)
= +
=
1.0 ( the amount is over 5 mln $)
0.8 ( the amount ranges wetween 3.0 and 5.0 mln $ )
0.6 ( the amount ranges wetween 1.5 and 3.0 mln $ )
0.4 ( the amount ranges wetween 0.5 and 1.5 mln $ )
0.2 ( the amount ranges wetween 0.1 and 0.5 mln $ )
Example of index calculation
Costs and losses criticality index C
Unscheduled repairs costs Manufacturing losses
Costs and losses
Costs and losses amount
Actual and expected costs
for scheduled and
unscheduled repairs
Actual and expected
profit lost due to
equipment downtime
+ Environmental and other costs
Actual and expected
environmental and other
costs
Sources:
-SAP ERP
-SAP Predictive Analysis
Equipment criticality index
Repair works criticality
Repair task aggregation and ranking (1)
Repair task aggregation and ranking (2)
Repair task aggregation and ranking (3)
Repair task aggregation and ranking (4)
Repair task aggregation and ranking (5)
Yearly program task transfer
Core features
■ Automatic budget limit control
■ Selection based on period, workshop and
station
■ Equipment ranking based on criticality
index
■ Orders, transactions and materials ranking
based on priorities
■ Double-monitor repair program
development mode support
CONTENTS ...
Contents
1
2
3
Major prerequisites and requirements
Planning business process overview
Implementation
Performance
4
SAP Asset Budget Control Performance
Results Business advantages
■ Increased efficiency in repair budget expenditure
■ Increased transparency in repair program development
■ Increased technical condition level of equipment
■ Decreased industrial equipment downtime
■ Conventional SAP support
■ No information gaps in repair business processes
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