{"id":102088,"date":"2023-06-07T00:00:00","date_gmt":"2023-06-07T04:00:00","guid":{"rendered":"https:\/\/sisn.com\/proactive-vs-reactive-work-order-setups-for-enterprise-asset-management-eam\/"},"modified":"2025-02-12T15:48:06","modified_gmt":"2025-02-12T20:48:06","slug":"thesis-qa-proactive-vs-reactive-work-order-setups-for-eam","status":"publish","type":"post","link":"https:\/\/sisn.com\/en-gb\/thesis-qa-proactive-vs-reactive-work-order-setups-for-eam\/","title":{"rendered":"THESIS Q&A: Proactive vs. Reactive Work Order Setups for EAM"},"content":{"rendered":"\t\t
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Q&A Blog Categories<\/strong><\/span><\/p>

Supply Chain<\/span><\/strong><\/p>

Sheldon Bloom<\/a><\/p>

Change Management<\/span><\/strong><\/p>

Katrina Kostes<\/a><\/p>

Business Intelligence<\/span><\/strong><\/p>

Scott Graham<\/a><\/p>

Project Cost Management<\/span><\/strong><\/p>

Ravi Kannan<\/a><\/p>

Managed Services<\/span><\/strong><\/p>

Jed Hall<\/a><\/p>

Enterprise Asset Management<\/span><\/strong><\/p>

Jim Nelson<\/a><\/p>

ERP Implementation Projects<\/strong><\/span><\/p>

Dr. JT Gorrell<\/a><\/p>

Construction Finance<\/strong><\/span><\/p>

Chelsey Stevens<\/a><\/p>

ERP Project Managers<\/strong><\/span><\/p>

Matt Morey<\/a><\/p>

Construction ERP Pain Points<\/strong><\/span><\/p>

Dave Wolff-Pellingra<\/a><\/p>

Women in Construction and Why it Matters – to Everyone<\/strong><\/span><\/p>

Laurie Jiminez<\/a><\/p>

On-Premise, and Other Construction ERP Insights<\/strong><\/span><\/p>

Charles Rathmann<\/a><\/p>

Real Cost of Procession Union Payroll Manually<\/strong><\/span><\/p>

Luke Dudenhoeffer<\/a><\/p>

AI in construction<\/strong><\/span><\/p>

Ajoy Bhattacharya<\/a><\/p>

ERP User Adoption<\/strong><\/span><\/p>

Steven Mulka<\/a><\/p>

Construction ERP Visibility<\/strong><\/span><\/p>

Mark Egan<\/a><\/p>

Changes in Construction Technology<\/strong><\/span><\/p>

Steve Jones<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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Jim Nelson | <\/span>SIS Senior Industry Consultant, Enterprise Asset Management (EAM)<\/span><\/strong><\/h2>

\"\"Interview by:\u00a0 Sarah D. Morgan, SIS Marketing Manager<\/span>
<\/span><\/p>

\"\"<\/p>

This week I sit down with Jim Nelson, SIS Senior Consultant, Industry (EAM), to talk about Proactive vs. Reactive Maintenance KPI\u2019s for ERP with Enterprise Asset Management. Proper EAM for the construction industry is key to operational and competitive success. Jim leads SIS\u2019s EAM group and has delivered over 100 EAM implementations to date including an underground Mining & Gold Processing Plant in Ghana where they realised they were literally digging for gold. See that case study at the end of this article.<\/p>

Q:\u00a0<\/strong>Tell us a bit about your background with Enterprise Asset Management (EAM)?<\/span><\/h2>

A:<\/strong><\/span> I have 30+ years delivering EAM Implementations, in a wide variety of industries, over 100+ implementations to date, with 10 years in EAM Sales & Marketing. EAM is in my DNA \u2013 my father climbed the ranks, starting in the storeroom, then mechanic, preventive maintenance manager and at the time of his retirement, was the EVP of Equipment & Operations, for S.J. Groves Highway Construction, formerly known as the largest interstate highway construction company in the history of the USA. His career included the management of the largest Caterpillar fleet in the USA. I learnt a great growing up at his side. I have also learnt a great deal working in over 100 EAM environments, including fleet & plant asset management implementation projects, training thousands of end users, shop management, storeroom renovation projects & inventory & purchasing management.<\/p>

Q: <\/strong>To get us started, what is EAM?<\/span><\/h2>

A:\u00a0<\/strong><\/span>EAM\u2019s origins come from Computerised Maintenance Management Systems (CMMS). Enterprise Asset Management software allows an organisation to track all \u201cmaintenance related activities on their maintenance worthy assets.\u201d EAM Software is most commonly used for asset history, component tracking, work order planning & scheduling, preventive maintenance scheduling, materials management, maintenance repair and operations (MRO) Inventory & Purchasing Controls.<\/p>

Q: <\/span><\/strong>What are common business requirements for EAM?<\/span><\/span><\/h2>
  • Asset Lifecycle History \u2013 \u201cCradle to Grave\u201d
    Asset LTD Cost Tracking by Location\/Job Site
    Work Request Entry by Operations
    Work Order Planning & Scheduling
    Preventive Maintenance Scheduling
    Component Tracking
    Capital Project Tracking
    MRO Inventory Control
    KPI\u2019s Development & Dashboards
    Robust Reporting Capabilities
    ERP Integrations
    Mobile Technology<\/li><\/ul>

    Q: <\/span><\/strong>What are the common benefits of EAM?<\/span><\/h2>
    • Ability to Track any \u201cMaintenance Worthy\u201d Asset \u2013 Build Meaningful History<\/li>
    • Increase Asset Reliability and Life Cycles<\/li>
    • Reduce Total Asset Ownership Costs<\/li>
    • Improve Optimal Asset Replacement Timing Decisions<\/li>
    • Improve Work Order Planning and Scheduling<\/li>
    • Improve Preventive Maintenance Scheduling<\/li>
    • Improve Outside Contractor (Vendor) Scheduling<\/li>
    • Improve Component Service Life<\/li>
    • Increase Warranty Claims Tracking<\/li>
    • Improve Communications Between Operations and Maintenance<\/li>
    • Improve Employee Productivity and Overall Satisfaction<\/li>
    • Reduce Double Entry of Information<\/li>
    • Increase Availability of Meaningful EAM Information<\/li><\/ul>

      Q: <\/strong>What is the typical cost justification for EAM?<\/span><\/h2>

      A: <\/span><\/strong>What most companies discover is the benefit of\u00a0Increased Labour Productivity,<\/strong>\u00a0with better organisation, and ability to track performance. You see an example in the table below. And as a fact, positive control can increase labour productivity.<\/p>

      \"\"<\/p>

      • Reduced Overtime Costs<\/li>
      • Reduced Outside Contractor Expense<\/li>
      • Cost Effective Preventive Maintenance Activities vs. Expensive Corrective Maintenance Activities<\/li>
      • Reduction of Maintenance Work Order Backlog<\/li>
      • Less Need to Re-Hire Staff Due to Attrition<\/li><\/ul>

        You also see ROI benefits around\u00a0Extended Normal Asset Life<\/strong>\u00a0through improved warranty tracking and improved maintenance scheduling. As a fact, preventative maintenance activities can increase asset life 10% to 20%. Another fact is preventive maintenance activities cost significantly less that corrective maintenance activities.<\/p>

        \"\"<\/p>

        A large justification is the\u00a0Reduced Asset Downtime<\/strong>\u00a0which is a factor of improved maintenance. An ROI fact is that planned maintenance activities will result in fewer emergency shutdowns as demonstrated in the table below:<\/p>

        \"\"<\/p>

        And then,\u00a0Reduced MRO Inventory and Purchasing Costs<\/strong>\u00a0which are reflected directly in the bottom line. EAM improvements can net 25% cost savings and provide forecasts for better long-term spending. Facts are that MRO inventory can be reduced one time by 5% to 10%. Another fact is that positive control of purchasing activities can reduce annual purchasing costs 2% to 3%. The table below breaks these out.<\/p>

        \"\"<\/p>

        Q: <\/strong>You mention Proactive vs. Reactive maintenance as the number one issue in EAM. Why is this the case?<\/span><\/h2>

        A:<\/strong><\/span> Generally speaking, reactive (corrective) maintenance costs far exceed proactive maintenance costs. A major indicator in EAM is the percentage of reactive vs proactive. Reactive maintenance can easily be 75%-80% reactive. Proactive maintenance of 75% can be achieved.<\/p>

        Q:\u00a0<\/strong>As a top issue for construction firms, what are the main problems of proactive versus reactive scenarios?<\/span><\/h2>

        A:<\/strong><\/span> The biggest problem is the lack of EAM system expertise, in other words, how to properly implement the system\u2019s features to \u201cswing the pendulum from reactive to proactive\u201d. Lack of Management Support. The tables below show a proper setup to first identify proactive work order types versus reactive work order types.<\/p>

        \"\"<\/p>

        \"\"<\/p>

        \"\"<\/p>

        Q: <\/strong>How is ERP helping solve those problems? <\/span><\/h2>

        A:<\/strong><\/span> The ideal solution is an ERP system that has a fully Integrated EAM system, as opposed to an EAM standalone system requiring integrations. A fully integrated system removes silos and gives you a view of the entire operation.<\/p>

        Q: <\/strong>How is SIS solving these problems?<\/span><\/h2>

        A:<\/strong><\/span> SIS provides a total solution combining ERP & EAM, fully integrated with Microsoft Dynamics 365 and SIS Construct 365. In addition, SIS provides EAM consulting services for the construction industry.<\/p>

        Q: <\/strong>Do you have a before and after case study to share? <\/span><\/h2>

        A: <\/strong><\/span>Yes, the client is AngloGold Ashanti (AGA) in Obuasi Ghana. It is an underground Mining & Gold Processing Plant. This case goes back to 2014. They were running Infor\/SSA BPCS iSeries, Their EAM System was Infor\/SSA iSeries EAM formerly known as-SSA\/Elke EAM.<\/p>

        Their EAM Objective was to Implement the MRO (spare parts) Inventory & Purchasing Controls system. We converted 10K+ part records from their ERP system to EAM to facilitate parts inventory and purchasing control objectives.<\/p>

        The storeroom project was to renovate an existing storage warehouse full of old project related materials, to create a Centralised MRO Storeroom. The Storeroom was designed to meet the needs of both underground mining assets, as well as any surface related assets. The major assets included Atlas & Sandvik drills, loaders and haul trucks. Prior to the construction of the new MRO Storeroom, spare parts were kept in a variety of underground locations and these parts were not identified in the ERP system. These underground locations were referred to as \u201cghost stores\u201d. It was a common order practise to order 3-4 if you needed 1, with the extras kept underground. The parts boxes shown in the picture below, numbered in the hundreds and were located in several different surface area shops. Over Project\u2019s 18 months, we inventoried every box and brought the \u201cghost stores\u201d to the surface to place them in the MRO Storeroom. The project highlight was the cleanup and organisation efforts resulted in identifying over $6M is usable parts. We were literally \u201cmining gold!\u201d You can see the before and after photos below.<\/p>

        THESIS Statement:<\/strong> “A major indicator in EAM is the percentage of reactive vs proactive. Reactive maintenance can easily be 75%-80% reactive. Proactive maintenance of 75% can be achieved.”<\/span><\/h2>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

        Q&A Blog Categories Supply Chain Sheldon Bloom Change Management Katrina Kostes Business Intelligence Scott Graham Project Cost Management Ravi Kannan Managed Services Jed Hall Enterprise Asset Management Jim Nelson ERP Implementation Projects Dr. JT Gorrell Construction Finance Chelsey Stevens ERP Project Managers Matt Morey Construction ERP Pain Points Dave Wolff-Pellingra Women in Construction and Why…<\/p>\n","protected":false},"author":1,"featured_media":102090,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[380,392,388,390,389],"tags":[],"class_list":["post-102088","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog-en-gb","category-eam-en-gb","category-industry-qa-en-gb","category-qa-en-gb","category-thesis-qa-en-gb"],"yoast_head":"\nTHESIS Q&A: Proactive vs. Reactive Work Order Setups for EAM | Construction 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