An Infoys Limited Guest Contribution

The electrical utility industry is characterized by huge and geographically widespread organizational structures. Moreover, the processes followed by industry players across their several business functions are cumbersome and complex. Today’s utilities face numerous challenges like high operational efficiency, stringent safety levels, high reliability and proactive customer service. Also, being asset intensive, emphasis on critically tracking assets availability and performance has become an  important  priority. With these ever growing demands, the work and asset management in the utility is changing and striving for excellence.

Enterprise packages populated  by  best-of-breed applications have been supporting utility work and asset management processes effectively for a long time. However, a futuristic outlook and ever growing demands of utilities has forced them to look beyond the boundaries of these work and asset management applications.  Greater emphasis is now being given to the functions which are more relevant to business, and address their long standing pain points. A typical example would be managing capital projects, spanning multiple years and sometimes multiple geographies. The inherent nature of such work, the financial reporting involved, budgeting requirements, and statutory & regulatory needs, demand more than what a standard asset management package could offer. Furthermore, smart and efficient data entry for field force, having limited interactions with complex software applications, remains an unattended and sought after area.

Efficient and quick customer service has been a challenge in the light of an aging workforce, leading to less knowledge about customers and their problems. Traditionally work management and customer management has been working independently and in silos.  Though, efforts were spent to optimize business processes, the benefits of such optimization programs were limited due to absence of mechanisms to ensure adherence and accountability.

To meet growing gaps, utilities either customize their software packages or bind their systems with external applications using complex integrations, only to realize the associated downstream challenges later.

Infosys with its extensive domain expertise in utilities and client interactions, identified these critical pain areas which utilities are facing and addressed them in the development of the Maximo Utilities Amplifier. This application leverages the inherent capabilities of IBM Maximo and combines utilities best practices.  Built on a robust framework of IBM’s Enterprise Asset Management for Utilities, it equips the business users with enhanced functionalities and supporting tools required for managing the ever-growing needs in this area.

The application  has been designed to build on the core utility Maximo feature to address extended work management needs. With a modified work order application, the application captures specific capitals works information like Tax,  customer and service information, overhead reporting, project and task linkages etc. A dedicated project budgeting application allows work planners and schedulers to define, manage and control project budget and its performance vis-à-vis work execution. Smart reporting  identifies critical functions for field crews by  consolidating information in a single portal. The application further  enables a user friendly and efficient data entry process, channelizing the effort in the right direction and optimizing the work hours. Standardized and repetitive process is automated using workflows, ensuring close process adherence and accountability.

Readers can learn more about this utilities industry application at: http://www.infosys.com/industries/utilities/Documents/IBM-maximo-utilities-amplifier.pdf

Know more about Infosys Supply Chain capabilities at: http://www.infosys.com/supply-chain/pages/index.aspx

About the Authors

Praveen Agrawal –Industry Principal, Consulting & System Integration, Infosys

Praveen is a subject matter expert in Asset Management – especially in Maximo – with knowledge levels spanning across functions and industries. Praveen has global experience of executing various EAM and ERP projects for Energy, Utilities, Manufacturing and telecommunication clients in various capacities. Praveen anchors Maximo Center of Excellence for Infosys which is responsible for developing solutions, tools, accelerates, processes and methods. He also manages IBM relationship for all advanced technologies for Infosys’ Energy, Utility, Communication and Services vertical.

Rejeesh Gopalan –Consultant, Consulting & System Integration, Infosys

Rejeesh Gopalan has worked extensively in package consulting around the Maximo Asset Management Software, with a clear focus on energy companies and utilities. As a Consultant, Rejeesh is responsible for providing leadership in multiple projects based on Maximo Asset Management Software, involving end-to-end implementation, upgrades and application support.

Disclosure: Infosys Limited is one of other named sponsors of the Supply Chain Matters Blog.

Supply Chain Matters had previously made reference to a two part commentary exploring sustainable operations and their relationship with asset management pain points which is being featured on the Infosys Supply Chain Management blog. Part One of this commentary included my recent guest commentary that responded to questions related to the growing interest in sustainability strategies and approaches within asset intensive industries. The questions explored my views of how asset intensive industries are starting to shift focus more toward sustainable operations and green assets, opportunities to tie these needs with asset management approaches and current concepts in smart buildings and IT data centers. The notion comes down to thinking a bit differently, that smarter asset management, real-time monitoring, coupled with sustainability and product objectives opens up new opportunities to compete for business and revenue growth.

In the Part Two commentary of this series, Praveen Agrawal, Enterprise Asset Management Consulting and System Integration lead from Infosys, along with the assistance of Joanna Karlic, a participant in the Infosys Global Internship Program, expand our ongoing dialog for this topic. Their posting reflects on the current focus areas of sustainability in asset intensive industries today, that being namely energy savings in buildings, with some suggested thoughts as to how broader based sustainability goals can be leveraged within focused aspects of Asset Management systems.

Our readers, especially those within asset intensive industries should gain benefit and insights from this series of commentaries and please share your own thoughts as well.

Bob Ferrari

Supply Chain Matters readers are probably aware that this author pens periodic guest blog commentaries on the Infosys Supply Chain Management Blog. The Infosys Asset Management consulting team has noticed that while discussing needs in asset management, clients are expressing new interest in coupling sustainability with asset management needs. Today we initiated a two part commentary to explore sustainable operations and their relationship with asset management pain points. In my initial guest commentary, I respond to a series of questions that were posed related to current sustainability challenges within asset intensive industries.  The questions explore my views of how asset intensive industries are starting to shift focus more toward sustainable operations and green assets, opportunities to tie these needs with asset management approaches and current concepts in smart buildings and IT data centers. The notion comes down to thinking a bit differently, that smarter asset management, real-time monitoring, coupled with sustainability and product objectives opens up new opportunities to compete for business and revenue growth.

In the second part of this series, Praveen Agrawal, Enterprise Asset Management Consulting and System Integration lead from Infosys will further list the areas in which asset intensive organizations are going to focus more on sustainability based on the current research which Praveen and his team are undertaking for clients.

Our readers, especially those within asset intensive industries should gain benefit and insights from this series of commentaries and please share your own thoughts as well.

Bob Ferrari

Disclosure: Infosys is one of other named sponsors of the Supply Chain Matters Blog and strives to promote thought leadership and insights for supply chain and asset management.

The latest quarterly earnings reports from the major U.S. railroads again reflect that shipment volumes and profits are on the rise, but behind the scenes, customer service and asset management remain a bit of challenge.

As an example, CSX posted a 13 percent gain in revenues and a 30 percent boost in Q1 profits.  CSX noted higher shipments in autos, auto parts and construction materials. Where the railroad once had 700 idle locomotives at the depths of the global recession, that number is down to 290.

Similarly, Union Pacific reported gains amounting to 13 percent in revenues and 24 percent in profits with a corresponding 5 percent gain in freight volumes.

Last week, an article published in the Wall Street Journal (paid subscription required) noted that U.S. auto makers are struggling to get finished automobiles and trucks to their respective dealers because of a shortage of railcars.  Chrysler, Ford and General Motors have been storing finished vehicles in temporary storage lots awaiting the scheduling and arrival of railcars for shipment.  This shortage of railcars has added days to expected dealer receipts and consequent sales. The article notes that now that U.S. manufacturing volumes are on the rise, the rail carriers do not seem to have enough active rolling stock in circulation to accommodate on-time deliveries.  Interesting enough, CSX acknowledged that the shortage of available railcars has had an impact on the carrier ability to transport finished vehicles from production sites to dealer locations.

We recently penned a guest commentary on the Infosys SCM blog noting how the past global recession has brought forward the critical importance of enterprise asset management (EAM) for asset-intensive industries such as railroads or utilities. As an example, U.S. industry shipments of railcars declined by 64% in 2009.  According to the Association of American Railroads, 2009 was the worst year for freight rail traffic, reaching its lowest levels since 1988.  In that same year, 28 percent of rail fleets were parked in storage, and one estimate noted that there were $43 billion in idle assets representing both leased and owned locomotives and railcars.  The BNSF railroad alone had rail cars that sat idle for up to three years on unused track stretching more than 30 miles in some places.  It seemed like every available rail spur was utilized as a storage location, a virtual real estate warehouse, as it were. As observers, we speculated on how railroads were able to track and account for all of these scattered idle assets.

Now that manufacturing is surging in the U.S. these same railroads are under pressure to accommodate increased service requirements, but that leads to challenges of locating idle assets, checking and inspecting equipment and sequencing locomotives and railcars into normalized train schedules.

While the financial numbers for U.S. railroads are steadily improving, the operational challenges of customer service as back once again.  In the backdrop lies the importance of integrated and timely inventory and scheduling of assets. That may well be the most important lesson for U.S. railroads and other asset-intensive industry.

Bob Ferrari

The following Supply Chain Matters guest commentary is contributed by Praveen Kumar Agrawal, Principal Consultant, SCM Practice, Enterprise Solutions, Infosys Technologies Ltd.

A classic but important debate concerning ERP vs. Enterprise Asset Management (EAM) systems keeps coming up in some of my client interactions within Infosys. I see this debate coming from two different types of client situations: (i) Clients currently using ERP systems but not as yet implementing any asset management functions who are now evaluating either asset management module of existing ERP or a best of breed EAM package, and (ii) Clients using a best of breed EAM package along with ERP for a considerable amount of time. Due to older versions of the technology, these clients now look for upgrading their ERP & EAM, and are considering whether to replace their EAM by ERP or upgrade EAM and ERP both.

I see this debate coming from two different functional viewpoints; IT and Business. The IT department does not want to handle multiple packages, multiple vendors, and undertake multiple system integration issues. Business, of course, needs the solution which is best suited to them in terms of meeting their business needs, usability, adaptability etc without caring much about ERP, EAM of any other jargon.

A couple of years ago, regarding this same subject, I made a presentation to a group of maintenance and IT managers from some renowned Indian government organizations and here is the gist of the articulated needs:

• Managing financials, supply chain and physical assets is a high priority for most organizations
• ERP systems were originally built to manage all of these but now have enterprise class asset management tools also built-in
• For a CIO: Single system is a tempting prospect which leads to financial savings and operational efficiencies
• For a CEO: Assets equate to a whole range of the organization’s assets; IT Assets, Fleet Assets, Building and of course production machineries

Businesses always complain about delays in getting the desired results from their ERP implementation considering the huge scope and multiple departments involved. This can often lead to a long implementation cycle. By the time that internal ERP consultants finish financials, manufacturing, inventory & procurement system functions it is time to upgrade. This leaves little time to think about overall asset management in the context of its dependencies upon inventory, manufacturing and financial modules in ERP. Then another long upgrade cycle begins and the asset management business benefits would still lag behind.

For ERP systems, asset management is just one module of very larger business problem which does get implemented only during end of ERP implementation; while for best of breed EAMs it is the area of business they are designed to address. Also, different industries have different asset management priorities and requirements:

• Oil & Gas industry has an emphasis on safety & regulatory compliance
• The Energy and Utilities industry would need GIS, Compatible Unit estimation etc
• Pharmaceutical industry has an emphasis on regulatory compliance and  auditing
• Fleet Management will emphasize mobile and quick solutions
• Governmental agencies emphasize regulations, property management and service desk

But at the same time, EAMs would not have solutions to cover all the business processes of financials, manufacturing, budgeting. Hence EAM alone is not the solution for the bigger problem.

In the end, the recommendations I provide clients would include:

• Go ahead with ERP. Take the advantage of its long implementation time by installing a best-of-breed EAM solution. This best of breed solution would give you instant benefits.
• Reap the benefits of best-of-breed Asset Management solution while your ERP is getting implemented and matured.
• Then either integrate to ERP or change over to full ERP solution.

The discussion often moves into the next mode – how to decide on the integration vs. the changeover. The most important points to consider should be:

• Business Process fit – Select the product which is best fit for the requirements.
• Usability – Should be easy to use considering not much IT savvy maintenance users.
• Product Roadmap – Product should have a long history in the market and in the domain. It should be compatible with organization’s other software solutions. The software vendor should have a clear vision on future releases/upgrades.
• Wider Scope –Managing assets simply does not mean managing some heavy production machines. An asset management solution should be able to manage all types of organizational assets like buildings, machines, IT assets, fleets etc.

If you have positive considerations about all of these above four points, then consider integrating EAM with ERP otherwise replace.

Earlier, on the Infosys SCM blog, I have written another blog on a very similar topic Will best of breed EAM packages be taken over by ERPs? Please read that as well for more insight.

About the Author: Praveen Kumar Agrawal is an Infosys SCM consultant with 13 years of experience in the IT industry. Praveen was part of the initial team which started the Maximo implementation practice within the Supply Chain Management (SCM). He is associated with Enterprise Asset Management (EAM) domain for the last decade, and has played key roles in product development and implementation for multiple EAM packages. Praveen shares his insights and viewpoints on current and future trends in asset management at www.infosysblogs.com/supply-chain

Further Disclosure: Infosys Technologies is one of other noted sponsors of the Supply Chain Matters blog.

Source: Getty Images

Supply chain professionals may visually recall that in 2009, at the height of the financial driven crisis and global recession, production and transportation volumes were dramatically impacted.  Significant value-chain activities became idle in a matter of weeks.   In that same year, 28 percent of rail fleets were parked in storage, and one estimate noted that there were $43 billion in idle railroad assets parked in any available storage location.  As noted in our pictorial, some railroads such as the Burlington Northern Santa Fe (BNSF) had idle railcars placed on unused track stretching for up to 30 miles.

As these and other assets are being re-activated, there are some important reminders on the changing scope and requirements for enterprise asset management.

In a current guest posting on the Infosys Supply Chain Management blog, I outline the important considerations that teams in asset-intensive industries should consider in their business process and supporting information technology strategies related to this topic.

I encourage readers to add their perspectives on this important topic.

Bob Ferrari