be invaluable.
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Reporting Out of SAP PM So with the data gathered by these two documents (the Notification and the Work Order), the report-ing capability of SAP becomes interesting.
Reports such as “Bad Actor Reports” (examples shown in Fig-ures 3 and 4) are easily compiled, singling out the worst of perform-ers in terms of overall maintenance costs. It can also be specifically aimed at material costs only of a specific type, or labor costs only of a specific type, etc. The report also shows the worst performers in terms of failure rate, outage time, or other more pertinent measures, as applicable.
In addition, other classical Main-tenance Management reporting of keen interest to Reliability Engi-neers also becomes possible, such as:
• The ratio of the preventive maintenance labor hours to total labor hours expended by the Maintenance Organization in the month, or any period chosen (see example in Figure 5)
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Figure 3: Cost Drivers
Figure 4: Man-Hour Drivers
Figure 5: Ratio of Preventive Maintenance Labor Hours to Total Labor Hours
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• The ratio of reactive mainte-nance labor hours (breakdown of high priority work which must be executed within less than a week) to total labor hours expended by the Main-tenance Organization in the month, or any period chosen (see example in Figure 6)
• The ratio of scheduled preven-tive maintenance work which is completed on time to the total preventive maintenance labor hours expended (Preventive Maintenance Compliance – see example in Figure 7)
Extended Reporting
It is well known that one of the enormous strengths of SAP is its integration capability with all business areas of an enterprise.
When these strengths are leveraged by integration of the PM data above with that available from the Finance Module (FI), Asset Accounting (AA), Quality Manage-ment (QM), and the Production Planning and Control Module (PP), even more powerful metrics become avail-able, such as:
ÿ Equipment Total Cost of Ownership (TCO), which includes all the costs of owning the equipment or asset. TCO directly relates to a business’ total costs across all projects and processes and, thus, its
profit-ability. This could be applied to a production unit, for example.
ÿ Overall Equipment Effectiveness (OEE), a primary metric of the discreet manufacturing sector. The overall performance of a single piece of equipment or even an entire factory will always be governed by the cumulative impact of the three OEE factors: Avail-ability, Performance Rate, and Quality Rate. OEE is a percentage derived by multiplication of the three ratios for the factors mentioned above. The OEE per-centage is used for analysis and benchmarking.
ÿ Total Cost of Unreliability (CoUR) represents a con-sistent measure of lost value across a manufacturing
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Figure 6: Ratio of Reactive Maintenance Labor Hours to Total Labor Hours
Figure 7: Ratio of Scheduled Preventive Maintenance Work Completed On Time to Total Preventive Mainte-nance Labor Hours
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facility. The Cost of UnReliabil-ity (CoUR) defines a “Delta” as any deviation from full produc-tion levels at full quality perfor-mance. Event driven, CoUR is used to identify and prioritize opportunities for improvement and reduction of losses. Typi-cally CoUR measures the total cost of an event to the plant, including labor, materials, and lost product (including quality losses). See Figure 8.
Conclusion
Having lived and worked for many years both as a Maintenance Engi-neer/Maintenance Manager and as an SAP Plant Maintenance practi-tioner in many different industries, I have had the privilege of experi-encing two often disparate worlds.
One seems dominated by the dynamics of the produc-tion, engineering, and maintenance business, where the focus is so often on production continuance and all the physical considerations that keep the plant in that happy status, almost at all costs. This world does not need maintenance historians or analysts because the hero of the sub-culture is the one who miraculously keeps production running tomorrow. It’s the NEXT!
syndrome.
The other is the longer term, meticulous perspective.
This perspective sees so many treasured opportunities to undo short term wasteful practices of engineering and labor utilization, through the lens of an information system that is so often woefully underutilized. There are few maintenance environments in manufacturing that will support and encourage this view.
The long-term view and compliance with some of the advice that SAP PM can give us will always clash with the short-term view, and will always cost more in the long term.
The treasure to be gained in the long term, however, if only we would follow it to the end, could not be esti-mated accurately, because there are so many positive knock-on effects.
Engineers, brothers and sisters, take the time to learn how to use SAP PM, to be true to your craft. There is wealth in that data.
You will not be popular to start with, but you may just become a STAR overnight when you spot that pattern in the failure statistics that everyone overlooked, or when you can explain the high running cost of a production line and how to reduce the costs by 25%, … and when best of all, no one can argue otherwise.
Go boldly! God speed!
In closing, I wanted to share with you a response a Maintenance Manager made to a complaint at a weekly Maintenance Engineers meeting. The Engineer’s com-plaint went something like “SAP is such a dog to work with, sir. I just don’t have the time to perform these transactions every day”.
Figure 8: Unreliability Cost
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...you may just become a STAR overnight when you spot that pattern in the failure statistics
that everyone overlooked...
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There was a moment’s silence and then the Manager spoke these words before leaving the subject:
“Gentlemen, this facility has chosen SAP as its core business system. If you are not in SAP, you are not in the business. Make your choices!”
I was present in that meeting, and it didn’t happen yesterday, or in the US. It happened in the early nineties in Africa.
So some managers have caught on … and they might be leading your competitors right now.
And, in case you were wondering:
Currently, more than 12 million users work each day with SAP solutions. There are now 121,000 installa-tions worldwide, more than 1,500 SAP partners, over 25 industry-specific business solutions, and more than 46,100 customers in 120 countries. SAP is the world’s third-largest independent software vendor.
So being in SAP might improve your marketability!?
Warren Bell, Olivet Inc. Warren is an independent consultant specializing in the SAP PM Module and Life Cycle Asset Management techniques. He has over 12 years of SAP PM Implementation experience, and 20 years of experience in Maintenance Management, Engineering, and Project Management in a multitude of industries. Warren also specializes in developing post-implementation solutions for clients who want to opti-mize the benefits of the PM module once their personnel have become mature in the basic uses of PM. You may contact the author at [email protected]. Be sure to mention the author’s name and/or the article title.
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S AP tip s Journal April/ May 2008 V olume VI Issue 2 Parallel Currencies – What They Are …
and Are Not
If you are a multi-national company based in the European Community and your Group Currency (GC) is EUR or in North America with the GC USD, then you probably translate your business transactions to and from your subsidiaries’ Local Currencies (LC) using the Exchange rates provided by one of the large financial data providers like the European Central Bank (ECB), Bloomberg, etc. Furthermore, you have probably auto-mated loading of those exchange rates and maybe limit manual access to the Exchange rates (transaction OB08 – table TCURR) to just one or two individuals in your headquarters.
How can you adapt your system setup to accommo-date the legal requirement of some countries – that local companies should use their local National Bank’s exchange rates – without changing your long-estab-lished Exchange rate processes?
SAP answers this requirement with the parallel cur-rency functionality. In summary, activating the parallel currency functionality entails creating an additional currency code in the SAP system and assigning that currency code to all necessary company code settings of the relevant subsidiary.
The “trick” is that the local subsidiary can then maintain all exchange rates to that new currency, in accordance with the local legal requirements (usually the rate provided by their National Bank); however, the exchange rates between all other currencies in the system, including the “official” local currency of that subsidiary, remain in your Group Finance governance.
After implementing the parallel currency, the SAP system automatically updates all financial documents in that company code in both currencies. This enables sufficient financial reporting to accommodate both your Group’s and your local subsidiary’s legal requirements.
There you have what parallel currencies are, but let me clarify what they are not because I have often come across much confusion about this. Parallel currencies