observation The past month I have been very busy in a specific area where PLM is not yet as understood. Where PLM is a ‘must have’ for companies developing and manufacturing products, in the world of Asset Development and Asset Management not many companies are yet aware of the benefits PLM can bring. I wrote about it in one of my previous posts . I will share some of my experiences here and I must thank Stephen Porter for mentioning my blog in his review (and pushing me to write today –  even during the soccer championships in South Africa.

PLM benefits for Owner / Operators

I had discussions with a few owner/operators in the past week and as they all came from different industries (nuclear power generation / gas distribution / chemical processing), the details might differ but the values a PLM system can bring is for all of them the same.

When talking to Owner/Operators there are a few standard situations you observe:

  • The usage of a transactional system (MRO / ERP /SCADA) which is managing the operational and financial activities as job scheduling and purchasing. Main dominant players in this area are Maximo and SAP. Most Owner / Operators believe that this is the only main system they need.This looks very similar to what we see in the typical manufacturing companies. They all have an ERP system, and specially in the mid-market these companies are not looking for another major IT-system.

The problem with only the transactional system as the core system for the company is that there is no natural storage for product or process information that can change (the Intellectual Property of the company). Transactional systems use pointers to actual product or process information that they require. But where do they store other and historical information ?

  • The challenge to manage in parallel data for maintenance, rework and  innovation projects.  As the transactional system provides data for the operational environment, these companies are used to copy out data to their project environment avoiding not released project data can be seen in the operational environment. Another situation in relation to the engineering projects is that the owner / operator usually outsources the engineering work to EPC contractors and only coordinates the activities taking ownership of the data only after the new installation is under operation

scandinavia The two owner / operators I met in the past month were in two different stages. The first one had already many years of experience in maintaining the plant operational  and there they understood that the SAP PM module could not help them managing all required plant information around scheduled maintenance projects. Having already four different document management systems in place, the biggest challenge remained to coordinate the different baselines for the various projects scheduled for the annual maintenance. At the end they developed the concept where the PLM system is the owner of all plant related information, based on an Asset Structure in PLM and the PLM system ‘pushes’ the right information to SAP when the changes become operational.

italy_greece The other owner / operator was in the early stage. They were planning to have a process to become operational. Their understanding is that they need only one system that provides them all the time the actual information and if needed also all the history and approvals of each of the components. For sure the actual information needs to be managed in a transactional system  (SCADA) and for sure the SCADA vendor will say they can manage all information in their system. The pity for this owner / operator is that once they need historical data, or need to manage complex maintenance projects, they have lost the opportunity to do it right from the beginning.

No_roiOf course there is also a significant difference between the two owner operators.. The first owner / operator is situated in the Nordics, where the cost of labor is high. This means investing in IT-solutions to assure people are working with the right information brings a much faster ROI as compared to the owner / operator from South Europe. Sometime the labor cost can be one-third or less in comparison to the Nordic countries.

The owner/operator in the South Europe will initially not focus on efficiency and reducing labor costs. Due to the economical crisis unemployment is also high, so working with less people – improving by investments in IT are also not a popular measure.

But for all owner/operators a main consideration should be to remain competitive also over 10 – 20 years. Short term strategy   is not good for this type of companies

Conclusion so far:

PLM concepts are bringing competitive benefits for Owner/Operator, despite the fact that they do not develop products. The value is based on bringing a single version of the truth (no island systems) and working in a single environment for the as-built and the to-be environment, without data conversions or transitions

next post I will talk about Asset Development and the PLM benefits