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When BoM data is incomplete, outdated or incorrect, this can incur costly issues that could very easily be avoided.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

Maintenance-related benefits:

• 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. 

A high performing plant is one that is safe, efficient, reliable, and profitable and there are many critical success factors that come into play when it comes to striving for excellence.

The philosophies cascading into the management systems and processes influences all 4 elements of what it takes to be a high performer. Without a meticulously designed and executed CMMS resulting from this, plants are subject to increased risk of equipment failure, loss of production, and excessive maintenance costs – which will directly impact the safety integrity and performance of the plant.

To truly optimize a plant’s maintenance and materials regime and unlock the associated benefits that come with it, it is key to build this regime using reliable, structured, and quality master data. Realizing the need to have this in place, Add Energy were contracted by an international energy company to deliver a global maintenance optimization project where we were tasked with enriching the CMMS data and optimizing the maintenance management regime, and associated spare parts in excess of 1.3 million equipment tags.

The challenge

To assure the right level of preventative and predictive maintenance and inspection, on the right equipment, was being done with the right materials, at the right time – no more, no less. Achieved through:

Efficient and effective warehouse management relies on good quality and accurate data, fit for purpose processes and technology and a competent team. When any of these key success factors are compromised, a business is likely to experience:

• Wasted expenditure
• Time delays
• Production deficits
• Poor productivity

Iain Wood is the Materials Manager at Add Energy and throughout his 30+ year career in the materials sector, he has gained firsthand experience of the headaches and issues that can occur when striving to effectively manage and track down items in a warehouse. In this blog, Iain discusses the main barriers that could be preventing you from achieving efficient and effective warehouse management, and the impact these challenges can have on a business when they are not managed correctly.

1. Poorly managed preservation maintenance

“For some items, preservation maintenance is required to assure they function as they should when they are required.

“The requirements for conducting preservation maintenance can make it difficult to keep track of the locations of critical items due to the maintenance log needing to be manually updated on a regular basis to reflect their condition change, I.e., their location or maintenance being completed. Some businesses may have specialist workshops miles away from the main warehouse, meaning stock that requires specialist preservation maintenance is subject to movement and therefore loss of control.

“If these condition changes are not updated in the digital inventory management system, or CMMS, this may result in items not being able to be located, confusion on whether it is available for use and exposure to risk, because the warehouse team are unsure if the item is safe for use because there is no record of it being maintained whilst in the warehouse, as per its requirements.

“In addition to this, in my experience, poorly managed preservation maintenance can also cause stock to perish quicker over time because there are no triggers or notifications for maintenance requirements, which may result in premature failure of equipment once installed and the need to replace the part at late notice, at a premium price point.”

The computerized maintenance management system (CMMS) is a vital tool for achieving effective and efficient maintenance and materials management. Having good quality, accurate and structured master data linked to functional locations and maintainable items within the asset register enables maintenance and materials management to be cost-effective and highly productive. 

In this blog post, our team of experienced materials and spares management experts share top tips on how to get the most out of your CMMS to unlock efficiency gains…

Unlocking the potential of your maintenance and reliability workforce through competency improvement programs is proven to minimize exposure to risk, boost company performance and optimize costs.

This year, Add Energy’s Country Manager for Canada, Afia McClenaghan has been invited to lead a panel discussion on this topic at the Operational Excellence in Energy, Chemicals and Resources summit, starting on June 1^st, 2021.

An aging plant is one that has typically been operating over several decades and is likely to have gone through significant changes, ranging from modifications to expansions and design changes. As the asset gets older, there are several challenges that will inevitably arise, such as over or under maintained equipment, difficulties purchasing spare parts or changes in operating conditions that can lead to corrosion, erosion, mechanical damage, and other late life degraded failures. 

Danny McGowan, Operations Manager at Add Energy, has 30+ years' experience in the oil and gas industry and has worked on asset management and process safety improvements projects for several aging assets throughout his career. In this blog post Danny discusses the top common challenges associated with aging assets and provides helpful tips on how to overcome them. 

An operating plant is subject to significant changes throughout its lifecycle, ranging from new owners to plant upgrades, design changes and expansions. When these changes are not managed correctly this can incur exposure to safety issues, downtime and unnecessary costs. 

The updating of condition changes must be reflected in the master data that resides in the CMMS or EAM to minimize these risks or what once felt like a well oiled machine for managing the plant maintenance will rapidly deteriorate.

Efficient inventory and spare part management is a fundamental requirement for achieving business performance goals and mitigating risk.

And unfortunately for us, a crystal ball for pinpointing exactly when you will need a spare part does not exist for helping to decide which spares should be kept in stock, how many you should hold and where they should be located. But what we can do to help inform stocking decisions is assess the factors that are directly linked to accessing the spare part you need. This should include data and information relating to the risk profile, lead times, storage costs, costs of loss and demand rates.

A safe asset is a reliable asset, and a reliable asset depends on sufficient equipment management strategies and risk mitigation barriers being put in place and adhered to through a systematic approach to asset management.   

To achieve this, companies must consider harnessing technology advances. With mass redundancies and cost cutting initiatives occurring all over the world in the wake of COVID-19, a transition to utilizing and adapting to “Industry 4.0” technology is more critical now than it ever has been.  

Safe, efficient and effective asset management is dependent on an optimized maintenance and integrity management regime, built upon reliable, structured and quality master data. 

For any new or operational plant, the CMMS build is a crucial requirement that will lay the foundation for managing the maintenance, integrity and reliability of the plant through its operational life-cycle. Getting this foundation element wrong will quickly be magnified in poor work execution, rework and extended lost production, directly impacting OPEX.