Know Your Kit & Kaboodle

If your business has a substantial investment in physical assets – typically machinery and vehicles – it should be obvious that it’s in your best interests to ensure they’re managed properly, so they’re always operational and therefore making you money, rather than losing it.

Yet too many firms today remain clueless about proper asset management, according to David Sankey, CEO of Greentree partner Addax Business Solutions (www.addaxsolutions.com).

To be efficient, plant operations require three core components: good tools (including the maintenance system), good people, and good vendors (including the maintenance system support). “I’m surprised how many businesses do not seem to practise this”, David says. “Companies need to know whether their assets are working as hard and as effectively as they should be.”

Minimising breakdowns

Any business owning fixed or mobile plant that requires maintenance has to allow for maintenance costs in its budget. Accurate forecasting of maintenance requirements and costs is key to a good maintenance budget, with unplanned maintenance (breakdowns) costs being kept to a minimum to avoid wreaking havoc. An asset management tool is crucial, to ensure that proper, planned maintenance is done in a timely and controlled way. For one thing, it can manage costs against the budget; for another, it can help to avert those costly breakdowns.

Companies that need good asset management fall into two categories: businesses that own and use their assets in their own production, and businesses that own assets for hire or contract work.

The first sort of business might be a mining company, for example. Those massive dump trucks that move tonnes of rocks and dirt can cost anywhere between half a million and two million dollars apiece. They’re expensive to maintain, and maintenance has to be carefully scheduled. Every hour that they’re not moving earth is unrecoverable in both time and cost, and for contract mining companies it is lost revenue.

The other sort of business might be a company that owns tower or mobile cranes for construction work. If they can’t supply a particular type of crane for a job because it’s unavailable due to a breakdown, that’s lost revenue again.

Managing Diverse Information

Asset management fails when a company doesn’t know whether an asset is making money, or is unable to keep plant running as it should. It is important to know and easily report on key performance statistics, such as planned and actual uptime, unplanned downtime, plant efficiency and availability, and other such measures of operational assets.

“Does the company know that it’s actually getting 98.65% utilisation out of that asset?” David asks. “How much unplanned down time do they have? How much is it costing and how efficiently is the plant working? That needs to be measured.”

Greentree’s Asset Management module allows you to track your physical assets, wherever they may be. The Field Service capability handles the details of service requests, such as timesheets and spare parts required.

“I’ll admit that I’m biased,” David says, “because Greentree is the only system I’ve found that brings all these components together.”

Greentree can provide crucial revenue and cost information across many dimensions, including asset, groups of assets, sales contracts, jobs and job types.

Breakdowns, work orders, timesheets and spare parts are linked in a single Greentree system, providing comprehensive management across Jobs, Assets, Field Service, Inventory, and Purchasing.

“This is where Greentree is really strong,” David says. “It’s one big system, and it’s seamless. So whatever information is entered, it will be immediately visible and available in all the relevant places throughout the system. By design Greentree is a single system with each module inherently part of all the other modules. It doesn’t matter where your transactions are coming from, it doesn’t matter how they originate or who’s entering it; in Greentree it’s going to be captured once and updated throughout the system.”

Plans need a planner

Having a good Supply Chain and Maintenance systems is only one significant part of a successful operation. Just as a good accountant will maximise the benefit of an accounting system, a good Procurement Manager is required to maximise a Supply Chain System, and a good Maintenance Planner is required to run a maintenance system efficiently.

David sees many businesses being let down by not having the right people. “In our market, it does not matter how good your IT person is; it does not mean they can produce good financial statements from an accounting system. Similarly, it is a common mistake to think a good mechanic or technician can produce good work orders from a maintenance system.”

Understanding Complex Data

Collating accounting data, physical tracking information and a wide range of other activities that relate to plant and equipment, into something that can be quickly accessed in an intelligible and simple form, is a daunting prospect.

This is the job of Greentree’s IQ* business intelligence module. With easily navigable and understandable dashboards, detailed information on planned availability, actual availability, number of breakdowns, frequency of breakdowns, planned and unplanned maintenance costs, or lost productivity due to lack of inventory, becomes a simple exercise for the users of Greentree. The dashboards are always tailored to give the information relevant to each business and at a level of detail required for each type of user. Anything else is confusing and could cost a business dearly.

“The costs a company can incur are massive and can vary widely by industry type, because an asset could be literally anything from a photocopier to an entire gold processing plant,” David says. “A gold processing plant could shut down just because you’re missing a $1 O-ring. It’s a little component, but how do you know it’s a critical component if you don’t have a list of critical parts properly controlled in stores?

“The cost of a properly implemented and managed supply chain and maintenance system is miniscule compared to the consequential costs of not having such a system. Unfortunately, we often see businesses only implement these systems after they have experienced significant losses – a very costly lesson!”

About David Sankey

David was born in Kenya and educated in Zimbabwe, before training in the UK as a management accountant. He specialises in business management, IT systems and internal controls. His extensive international experience includes gold exploration in Ghana, farm management in Zimbabwe, and oil exploration in the Arctic Circle.

Based in Perth, Western Australia, his hobbies include welding, diving and electronics. He and his wife, Kristen, have two children: Tyler (11) and Samantha (9).

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