Today's top market pressures driving manufacturers to continue to seek means to improve asset performance are the need to improve return on assets (ROA) and complying with customer demands for higher quality and shorter lead times. Companies are attempting to negotiate controlled cost of capital and value to shareholders with the need to provide customer value.

In other words: balancing customers and shareholders.

A recent Aberdeen Group report, entitled Ground Up Strategies for Asset Performance Management, had this to say:

Optimizing asset performance is the key to controlling costs (and seeing the return to shareholders) and maintaining product quality (providing value to the customer). Optimizing across conflicting goals and objectives across the maintenance and production teams offers the opportunity to enhance the economic value of their investments.

Achieving this nirvana scenario on the plant floor, though, takes some straight thinking and planning. Aberdeen's September 2007 report presented some ideas on how to improve operational performance with subsequent greater shareholder value.

The research firm used four key performance indicators to differentiate "best-in-class" manufacturers from the rest, and found that the former among the 230 manufacturers averaged the following performances:

• Overall equipment effectiveness (89 percent);
• On-time delivery (96 percent);
• Plant throughput (97 percent); and
• Asset effectiveness (95 percent).

Aberdeen offered the following steps to needed to achieve best-in-class performance:

• Align management goals, objectives and metrics across various teams.
• Establish cross-functional teams to foster a corporate culture for reliability.
• Invest in asset performance management (APM) capabilities such as condition-based monitoring, reliability-centered maintenance, performance monitoring and analytics.
• Focus on driving business process interoperability across functional organizations.

The following are specific steps toward improving operational performance via optimizing asset availability, utilization and flexibility:

• Measure meaningful metrics that links operational performance with business performance.
• Establish a cross-functional team including maintenance, productions, and reliability engineering to create a corporate culture for reliability.
• Invest in technology — specifically capabilities such as reliability-centered maintenance (RCM), condition-based monitoring (CBM), statistical process control (SPC) tools and enterprise manufacturing intelligence (EMI).

Capturing, analyzing and effectively using machine condition information provides a strategic and competitive advantage, allowing companies to maximize their return on investments (ROI). Once a business has authorized buying hardware and/or software needed for enhanced APM, it is worth considering this suggestion from BioPharm International a couple of years ago: "Project managers [...] should look at operational objectives such as supply chain and throughput, as well as tactical objectives such as safety procedures and consolidation of vendor parts.

"This advanced planning will pave the way for a successful solution implementation."

Resources

Ground Up Strategies for Asset Management Performance
by Bharat Nair
Aberdeen Group, September 2007

Condition-Based Monitoring Program a Useful Tool in Predictive Maintenance
by Rockwell Automation
Plant Services

Leveraging Asset Performance Management in Pharmaceutical Manufacturing
by Matt Lingie
BioPharm International, July 1, 2005