Supply Chain in Maintenance
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- The document discusses the implementation of an enterprise asset management (EAM) and supply chain management (SCM) system for an LPG plant. - It proposes implementing a state-of-the-art EAM system like Oracle eAM and integrating it with an industry standard SCM system to improve asset integrity and supply chain functionality. - The scope of work includes defining system boundaries, applying the manufacturing planning and control lifecycle, designing data templates, and establishing metrics to control the information flow and measure SCM performance.
Supply Chain in Maintenance
- 3. Main Model SCM Design Employ Doing The Work Right (ERP) •During the 1980s, manufacturing became a lot more intelligent with the creation of ERP. Doing The Right Work (CMMS) •At about the same time there were other industries, seeing a rising cost in physical asset maintenance and management. Doing The Right Work Right (EAM) •The term Enterprise Asset Management (EAM) appeared to emerge around the beginning of the 1990s.
- 5. Main Model SCM Design Employ “Supply chain talks logistics”
- 6. Integrity is a concept of consistency of actions, values, methods, measures, principles, expectations, and outcomes. Main Model SCM Design Employ
- 10. LPG Production Plant Sustainability Finance Human Resource Natural Gas Process Control Product Storage Product Loading Purchasing & Transportation Warehouse & Transportation Maintenance Activity Asset Reliability Main Model SCM Design Employ Dynamic Model LPG Plant
- 15. – material, – information, and – finances. – design, – plan, and – Execute Supply Chain Main Model SCM Design Employ
- 16. SCM in a Supply Network Suppliers Demand Services KPI’s Information Activity Main Model SCM Design Employ
- 20. ExecutionPlanning & Scheduling Work Request Delivery Material Planning & Information Sharing MaintenanceTechnical SupportStakeholders Logistics Supplier Main Model SCM Design Employ
- 21. ExecutionPlanning & Scheduling Work Request Delivery Material Planning & Information Sharing MaintenanceTechnical SupportStakeholders Logistics Supplier Main Model SCM Design Employ
- 22. ExecutionPlanning & Scheduling Work Request Delivery Material Planning & Information Sharing MaintenanceTechnical SupportStakeholders Logistics Supplier Main Model SCM Design Employ
- 23. ExecutionPlanning & Scheduling Work Request Delivery Material Planning & Information Sharing MaintenanceTechnical SupportStakeholders Logistics Supplier Main Model SCM Design Employ
- 24. Purchasing & Logistics Maintenance Activity Asset Reliability Low Quality (Financial, Transport) Unreliable Delivery Poor Utilization of Resource Capacity Accumulation of Work Orders Increasing Backlog No Metrics Tracking Improvement Resisted Additional Complexity Plant Sustainability Integration in SC Main Model SCM Design Employ
- 25. Work Order Asset Priority Activity Operations Spares People Equipment Tools Time Frame Consumables Main Model SCM Design Employ
- 28. Main Model SCM Design Employ Definitions •Response Time – Is longer lead time acceptable? •Service Level –Expect immediate delivery or accept partial deliveries of products and longer lead times?
- 29. • Day-to-day operations. • Picking, packing, and delivery. Main Model SCM Design Employ Warehouse Management Systems
- 30. Logistics & Distribution System • Logistics: getting the right material to the right place at the right time in the right quantity. Main Model SCM Design Employ
- 31. Inventory – On shelf, and – work in process. Main Model SCM Design Employ
- 32. • Cycle Inventory – Satisfy demand. • Safety Stock – Buffer against uncertainty. • Seasonal Inventory – Build up in anticipation of predictable increases in demand. Inventory Types Main Model SCM Design Employ
- 33. Fixed Order Quantity Main Model SCM Design Employ TIME . . . . . . . . . . . . . . . . . . . . . **REORDER QUANTITY (Q) LEAD TIME (L) MAXIMUM RATE OF USAGE WITHOUT STOCK-OUT Q Q STOCK LEVEL *REORDER LEVEL POINT (A) EXPECTED RATE OF USAGE (R) BUFFER STOCK LEVEL
- 34. Fixed Order Cycle Main Model SCM Design Employ . . . . . . . . *ORDER UP TO LEVEL **REORDER QUANTITY Q1 STOCK LEVEL BUFFER STOCK LEVEL TIME Q2 Q2 Q3 Q3 LEAD TIME (L) . . . . . . . . . . . . . . LEAD TIME (L) REVIEW PERIOD (T) REVIEW PERIOD (T) Cover period **REORDER QUANTITY
- 35. Common Causes of Stock Outs Main Model SCM Design Employ Quantity Time R SS L Q Demand Uncertainty Quantity Time R SS L Q Lead Time Variability (LT = Cycle Time + Transit Time) Quantity Time R SS Q Supply Uncertainty
- 40. MTO Strategy Main Model SCM Design Employ •Purchase supplies to their requirements. •Start activity once the work order is released. •Wait time for execution, •Allow for more flexible customization.
- 42. Main Model SCM Design Employ Why it is not working? We are not synchronized Need SCM?
- 43. Implementing a state-of-the-art industry standard Business Plan •Low Cost •Differentiated •Horizontal Focus Business Strategy •MTO SC Strategy •Industry Standard: Asset Management Supply Chain Management •State-of-the-Art: Oracle eAM Business Plan Main Model SCM Design Employ
- 45. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand ResourceMasterPlanningExecution Business Plan • Logistics • SCM Main Model SCM Design Employ
- 46. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning Rough-cut Capacity Planning MasterPlanningExecution Capacity Requirements Planning Capacity Control Operations Planning Master Schedule Material Requirements Planning Production Activity Control Final Assembly Schedule Forecasting Demand Management Distribution Requirements Planning Business Plan • Logistics • SCM Main Model SCM Design Employ Planned Firm Planned AllocatedReleased Exploded Sequenced Completed
- 47. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning MasterPlanningExecution Business Plan • Logistics • SCM Main Model SCM Design Employ
- 49. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning MasterPlanningExecution Forecasting Business Plan • Logistics • SCM Main Model SCM Design Employ
- 50. Principles of Forecasting • Forecasts are usually wrong. • Every forecast should include an estimate of error. • Forecasts are more accurate for families or groups. • Forecasts are more accurate for nearer periods. Deterministic Probabilistic Main Model SCM Design Employ
- 51. Forecasting Influence • Forecasting errors can increase the total cost of ownership for a product - inventory carrying costs, - obsolete inventory, - lack of sufficient inventory, and - quality due to accepting marginal products to prevent stock out. Main Model SCM Design Employ
- 52. Forecasting Benefits • Essential for smooth operations of business organizations, • Estimates of the occurrence, timing, or magnitude of uncertain future events, • Costs of forecasting: – excess labor; – excess materials; – expediting costs; – lost revenues. Main Model SCM Design Employ
- 53. Forecasting Estimates • Predicting future events, • Usually demand behavior over a time frame, • Qualitative methods – Based on subjective methods. • Quantitative methods – Based on mathematical formulas or statistical methos. Main Model SCM Design Employ Demand Behavior
- 54. Demand Behavior Time (a) Trend Time (d) Trend with seasonal pattern Time (c) Seasonal pattern Time (b) Cycle DemandDemand DemandDemand Random movement Main Model SCM Design Employ
- 55. 150 – 125 – 100 – 75 – 50 – 25 – 0 – | | | | | | | | | | | Jan Feb Mar Apr May June July Aug Sept Oct Nov 5-month 3-month Actual Orders Month Main Model SCM Design Employ • Average several periods of data. • Dampen, smooth out changes. • Use when demand is stable with no trend or seasonal pattern. Moving Average Method
- 56. 70 – 60 – 50 – 40 – 30 – 20 – 10 – 0 – | | | | | | | | | | | | 1 2 3 4 5 6 7 8 9 10 11 12 = 0.50Actual Orders Month = 0.30 Main Model SCM Design Employ • Averaging method • Weights most recent data more strongly • Reacts more to recent changes • Widely used, accurate method Exponential Smoothing Method
- 57. Forecast Control • Reasons for out-of-control forecasts – Change in trend – Appearance of cycle – Weather changes – Projects – Outsourcing – Politics Main Model SCM Design Employ
- 59. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning MasterPlanningExecution Operations Planning Forecasting Business Plan • Logistics • SCM Main Model SCM Design Employ
- 61. The First OP Meeting •It is intended to be primarily a learning experience. •It won’t be perfect and may not have all the data we need. •The frequency and timing should be aligned with financial processes. Main Model SCM Design Employ
- 62. •The purpose is to update the plan (demand, operations, finances) as a result of changes in the external and internal environments. –Even though the logic of OP is simple, implementing is not. –Implementing it requires people to make changes and to do some aspects of their jobs differently. Cycle OP Meeting Main Model SCM Design Employ
- 64. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning Rough-cut Capacity Planning MasterPlanningExecution Operations Planning Master Schedule Forecasting Demand Management Business Plan • Logistics • SCM Main Model SCM Design Employ
- 68. Demand Management - Planner Main Model SCM Design Employ
- 70. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning Rough-cut Capacity Planning MasterPlanningExecution Capacity Requirements Planning Operations Planning Master Schedule Material Requirements Planning Forecasting Demand Management Business Plan • Logistics • SCM Main Model SCM Design Employ
- 75. • Planner • Mgr • SE • JE Manufacturing Planning & Control (MPC) MaterialDemand Resource Resource Planning Rough-cut Capacity Planning MasterPlanningExecution Capacity Requirements Planning Capacity Control Operations Planning Master Schedule Material Requirements Planning Production Activity Control Final Assembly Schedule Forecasting Demand Management Distribution Requirements Planning Business Plan • Logistics • SCM Main Model SCM Design Employ
- 76. DRP Main Model SCM Design Employ •It organizes inventory requirements on central supplies Distribution Requirements Planning Warehouse Weekly List Purchase Weekly List Finance Weekly List Transport Weekly List
- 77. PAC & FAS Main Model SCM Design Employ •PAC responsible for: Executing the master schedule and the material requirements plan. I/O controlling and WO sequencing on a daily basis. Creating and monitoring the FAS on a daily basis. •FAS is responsible for maintenance operations execution.
- 78. Capacity Control Main Model SCM Design Employ •Measures WO completion and compares it with the capacity plan. •Determines if the variance exceeds pre-established limits. •Takes corrective action to get back on plan if limits exceeded. •Carried out on a daily basis.
- 79. Main Model SCM Design Employ I am not ready yet. Need collaborative planning? I asked for a push. Are you there?
- 80. Main Model SCM Design Employ System Formulation Define all system components and boundaries. 1. WO Boundary, 2. Segmenting and piloting, 3. Inventory delivery nature, 4. Metrics selection measure, 5. Responsibility matrix assignment, 6. Planning phases frequencies, and – etc.
- 81. Main Model SCM Design Employ Project Stages 1 Develop a supply chain strategy 2 Gather supply chain information 3 Develop effective partnerships and alliances 4 Pilot new supply chain solutions 5 Organize for supply chain performance 6 Develop measurement system for supply chain performance
- 82. 1. Service level assessment, 2. Plant and distribution network design, 3. Inventory management, 4. Business processes, 5. Organizational design and training necessities, 6. Performance metrics and goals. Develop a supply chain strategy Main Model SCM Design Employ
- 84. Implementation Main Model SCM Design Employ May Jun Jul Aug Sep Oct Nov Dec Jan Feb
- 85. Proposed Scope Main Model SCM Design Employ • Implement supply chain system Define boundaries and responsibilities, Apply MPC lifecycle, Design data templates, Control information flow and authorities, and Define SCM metrics. • Combine SCM with Oracle management system • Integrate with other management systems (Future) Risk assessments and safety permits, Project management, QA & QC, and Studies and MOC.
- 86. Main Model SCM Design Employ What is wrong? You need to monitor and control. We planned and it’s not working yet.