Accurate and reliable equipment and maintenance Bill of Materials (BoMs) are crucial for assuring the correct equipment, with the correct specifications are procured in a timely and cost effective manner. A highly functional BoM will include a comprehensive list of materials, components and instructions required to build, replace or maintain a piece of equipment.
When BoM data is incomplete, outdated or incorrect, this can incur costly issues that could very easily be avoided. Focusing on enriching and verifying your BoM data is proven to unlock significant efficiency gains across the entire operations of a plant, and should be one of the first steps that plant operators should consider when looking for opportunities to improve performance.
We recently caught up with Iain Wood, Add Energy’s Materials Manager, who has shared key insights from the world of BoM development and enrichment. In this blog, Iain shares advice on how to recognize indicators that could signify the need to improve your BoMs, the benefits of doing this, and a proven, step-by-step process to follow for developing and enriching your BoM data for optimal return on investment (ROI).
What are the common signs and symptoms that could signify the need to improve your BoM data?
- “Holding obsolete stock - Holding parts for equipment that is no longer required could result in having significant capital tied up unnecessarily. A big cause of this is equipment becoming obsolete, and BoMs not being updated to reflect this condition change. When this happens, the part is believed to be still required and will tie up valuable space and resources to store and preserve it in the warehouse.
- “Inflated procurement costs - On the other end of the spectrum, if equipment has never been identified as part of a BoM, but is actually required, this can result in direct purchasing from manufacturers at the last minute, as they are not readily available in the inventory. It is common for last minute orders to be required at short notice, and this is often reflected in the cost. Expediting orders in this way is extremely inefficient, costly, and can also cause delays in maintenance and extended periods of outage.
- “Holding excess stock - Equipment manufacturers, vendors or EPC contractors tend to often recommend as many spares as possible be included in a BoM, as they will make profit from this. To avoid being left with surplus stock and tying cash up unnecessarily, these recommendations should go through a 3rd party review and verification process whereby the SPIRs/SPILs are reviewed by both the plants materials and maintenance specialists, to determine what is actually required for your specific plant.
What are the benefits of developing and enriching BoMs?
“Well maintained BoMs should provide a source of truth for multiple teams across the business, and provide a reliable list of spares required to effectively maintain and operate equipment throughout its lifecycle. They are ultimately the foundation for smooth, efficient operations, with significant benefits felt across inventory, maintenance and procurement teams.
Inventory and procurement-related benefits:
- Assuring the correct spare is ordered
- Minimizing the need for direct purchasing and last minute orders, which saves costs
- Reduction of excess inventory
- Potential to sell spares that are not required, and get money back or credit notes for vendors
- Reducing rental costs and warehouse footprint, if less spares are required
- The ability to easily determine if non-moving stock is required for an active asset
- The ability to identify similar items or equipment where individual materials can be standardized or substituted
- Faster and accurate execution of both planned and unplanned work
- Less preservation maintenance required, as there is less stock
- Minimized risk of shutdowns
- Ability to plan maintenance effectively, assuring the right spare is available for maintenance
- Avoid delays in maintenance, causing unhealthy maintenance backlog
The step-by-step process to developing and enriching BoMs:
“A BoM development and enrichment project is a timely and resource heavy initiative to run internally. For plant operators who want to unlock the benefits associated with accurate and reliable BoM data, but don't have the resources internally to do this, outsourcing this work to a team of specialists is a highly efficient option.
“In addition to shifting the burden of the work to an external specialist, this tactic can also bring additional benefits relating to cost, turnaround time and quality.