I can see clearly now…my work order costs are categorized

In this blog post, we will explore the benefits of breaking down and categorizing work order costs in your APM system.  As an added bit of fun, we’ve dropped some song lyrics into the text to see how many of you can find all of the songs referenced.  Most lyrics are exact, some have been tweaked a bit for fit.  The first three readers to reply back to us with the song names and artists of these 10 hidden gems will win a free one-year premium subscription to Itus Digital’s Asset Risk Analyzer solution.  All readers can also sign up for our free version at www.assetriskanalyzer.com.  Now on to the blog.  Go ahead and get what you can from it, hear what you want to hear and disregard the rest.

The analysis of maintenance data for reliability purposes is a tale as old as time.  Engineers track it through spreadsheets, in CMMS/EAM systems, push it into reliability tools and Asset Performance Management solutions, or simply keep it in their heads (as if they’ll never leave here tomorrow).  As integration from CMMS/EAM systems into analytical tools has become easier over the years, the use of order costs has played a large role in reliability analyses as unnecessary spend is a key driver for improvement initiatives.  Most CMMS/EAM to APM integrations include aggregate order costs and, with this data, you can quickly get to average cost of repair or failure and run those analyses all night long, all night.

But let’s say you want or need to get more detailed in your cost analysis.  What is the impact of higher material costs or contracted labor as it relates to reliability issues?  In that case, it’s time for a breakdown.

Here is a great perspective from our colleague, Ken Latino with Prelical Solutions:

Having a breakdown of individual maintenance costs in APM is very beneficial when you are performing analysis on your work order history.  This simply means breaking out the total cost of a job into the various cost buckets (cost elements).  These typically include outside services, labor, internal materials, and the like. 

For example, it helps planners to be able to quickly see the details of how money was actually spent.  If we see that we are always exceeding the labor cost for a particular type of job, planners can determine what is causing the difference.  Perhaps they are not providing proper instructions on the order, maybe parts are incorrect which causes multiple trips to the storeroom, etc.  Ultimately, this can help planners make the job plans more efficient and estimate jobs more precisely in the future. 

It can also be helpful to know the cost of outside services for typical types of jobs.  This gives maintenance managers better visibility into what they are contracting out.  Perhaps they might decide to staff some of this work internally or find more competitive pricing depending on the amount of work that is being contracted.

If you do not have the order costs broken down in APM, I highly recommend splitting them out.  There are a ton of creative uses of this data in making maintenance more efficient in the field.

To summarize Ken, having this enhanced data available allows organizations to more easily analyze reliability data and identify trends or patterns that may not be apparent when looking at total work order costs. This can help organizations make data-driven decisions to improve reliability and reduce costs through their Asset Strategies.  All I want is to have my peace of mind, which is what an educated, comprehensive Asset Strategy can provide us.

What is not as common is to have the breakdown of the orders costs available within the APM system.  Cost elements of a work order are typically a configuration within the CMMS/EAM system so each customer of that software can have the categories that best match their business.  As a system level, Company A’s “Material Cost” category is not the same as Company B’s.  Using SAP EAM as an example, you can decide the cost elements that you want to be available in the system.  For each, there is an underlying key value that is hidden from the user but used by the system for keeping track of detailed cost allocations.  This key value is different across SAP systems and this creates challenges for getting work order cost breakdowns in your APM system.

For many APM owners, this is the end, but don’t drink the Kool-Aid, my friends.  If you have SAP integrated with GE APM/Meridium, Itus Digital can help.  We have designed an integration add-on solution that can quickly break down your costs, based on your configuration, without changing the underlying SAP EAM configuration.  If this is something you are interested in, please reach out to us for more information here.

In summary, utilizing the breakdown of costs on your work orders can help improve the impact of your reliability engineering and maintenance optimization efforts.  As one eclectic group of people once said (or possibly sang), “Use it or lose it.”

If you were playing the name the song/artist game, thanks for participating.  Our Winner is Nick Johnson at Eastman Chemical.

Here are the songs and artists ‘hidden’ in this blog:

“I can see clearly now” – I Can See Clearly Now – Johnny Nash

“…hear what you want to hear and disregard the rest.” – The Boxer – Simon and Garfunkel

“…tale as old as time” – Beauty and the Beast – Celine Dion and Peabo Bryson

“…leave here tomorrow” – Free Bird – Lynyrd Skynyrd

“…all night long, all night” – All Night Long – Lionel Richie

“…it’s time for a breakdown” – My Lovin’ – En Vogue

“All I want is to have my peace of mind.” – Peace of Mind – Boston

“…this is the end.” – The End – The Doors

“…don’t drink the Kool-Aid, my friends.” – Lemon – N.E.R.D

“Use it or lose it.” – Use It or Lose It – Motley Crue