By Sid Snitkin, ARC Advisory Group
Summary
Oniqua recently gave ARC a thorough demo of Oniqua Analytics Suite (OAS), which is their unique, comprehensive set of solutions for managing MRO materials. While most EAM and ERP systems have modules for managing MRO materials, Oniqua’s solution takes this to the next level, enabling owner/operators to optimize their performance in this critical aspect of Asset Performance Management (APM).
Having the right MRO materials on hand is critical to ensuring high availability of asset-intensive operations. At the same time, MRO materials are a major expense for owner/operators, representing hundreds of millions of dollars in annual expenditures for many organizations. So reducing MRO materials has become a key focus for many APM initiatives. Balancing these two conflicting goals is the essence of good MRO Material management and Oniqua’s OAS solution provides the tools users need to accomplish this.
MRO Material Improvement Is a Strategic Challenge
Managing MRO materials is a big job. Most work orders involve some materials and a typical plant can need thousands of different items, from hundreds of different suppliers and distributors.
Without a doubt, EAM and ERP systems have proven invaluable for everyone involved in managing MRO materials. They provide order and automation to the processes involved in ordering, storing, and disbursing critical parts and consumables. However, their focus is limited to the tactical aspects of MRO materials managements. Deciding what materials are needed, when they should be ordered, how much stock to maintain, and which suppliers to use are strategic responsibilities left to others. This is where the real opportunity lies for improving asset availability and material costs.
OAS focuses on the strategic aspects of MRO materials management and supports this with a collection of software modules that enable organizations to make these decisions rationally. Their metrics capability enables organizations to track and control the availability and cost impact of MRO material decisions. In addition, their analysis tools enable organizations to identify potential improvements and do rapid “what if” analysis of the impact they will have on operations before changes are actually made.
The Right Tools for Every Stakeholder
OAS modules provide strategic support for each key stakeholder in MRO materials management, whether they manage materials, procurement or maintenance & reliability. First, the modules enable the organization to profile its MRO supply chain in terms of asset performance and business impact. Then, they provide the tools needed to drive performance improvements:
· Material Managers – tools to optimize stocking levels based upon a blend of optimization algorithms that consider a variety of MRO-specific segmentations and constraints such as risk, outage costs, etc. and enable optimization around a variety of goals such as service levels and costs. These tools also track inventory performance, automatically make strategy adjustments, and use exception notification to keep material managers involved in major recommendation changes.
· Procurement Managers – tools that identify suppliers with a significant impact on asset performance (spares, services, cost of supply, quality of supply) and enable management of supplier strategies (based on risk and asset performance) through performance measurement and the rapid development of mitigation strategies should a supplier fail to perform. The associated charts and reports facilitate supplier management and supply base rationalization and collected data is used to automatically adjust key inventory parameters, like delivery times.
· Maintenance & Reliability Managers – tools to monitor the impact of MRO policies on asset availability in terms of cost per unit of production, mean time between failure (MTBF), etc. Metrics can be aggregated across multiple facilities, which extends the capabilities of similar metrics an organization may have in their EAM and ERP systems.
Integrated with Popular EAM and ERP Systems
As noted earlier, MRO material management involves thousands of items whose strategies need to be monitored, reviewed, and adjusted frequently. This is one reason why organizations see their MRO inventory policies deteriorate over time. Even if they have the tools to develop good strategies, they can’t maintain the multitude of parameters needed to keep such strategies effective.
Oniqua addresses this problem as well by integrating their tools with the owners existing EAM and ERP solutions. Strategy performance is continuously monitored by accessing work orders, purchase orders, deliveries, etc. and parameters are automatically adjusted to reflect changes. Integration enables Oniqua’s tools to keep the organization’s tactical solutions continuously updated with all strategy adjustments
Designed by People Who Understand MRO Materials
Expert knowledge is a key feature we saw reflected in Oniqua’s solutions. This distinguishes OAS from other inventory optimization solutions. MRO materials may be similar to many products that organizations manage, but the criteria used to achieve optimum availability and cost are quite different from those used in typical supply chain management. Oniqua also integrated the knowledge their people have about maintenance and MRO material management in other modules. It was also clear from the discussion that the company used its 20 years of experience supporting asset- intensive organizations to fine tune this knowledge-based approach.
Delivered in Many Ways to Users and Industries
While Oniqua began as a company supporting the mining industry in Australia, its clients today span a variety of asset-intensive industries around the globe. This includes mining, oil & gas, utilities, manufacturing, and transportation companies across Asia-Pacific, Africa and the Americas.
The company sells its products to users directly and through strategic partners. While organizations often begin their relationship with Oniqua through module-specific purchase by individual departments (such as materials, procurement, or maintenance), its customers generally extend their commitments to the complete suite in order to maximize the benefits. Oniqua also provides MRO material management as a service to some clients, and, in such cases, they use the solutions themselves to keep their clients inventory practices optimized.
With Support that Ensures Success
With the right tools in hand, organizations can take real control of their asset performance. But their efforts can still be undermined if the organization doesn’t have high-quality, trustworthy information. Oniqua addresses this issue as well through content management services that help companies standardize, organize, and optimize their MRO-related transactional information.
Last Word
OAS can complement your investments in EAM and ERP systems. It can enable you to extract additional value from the information you already collect and return this through higher asset availability and lower costs. Oniqua’s experience indicates that most companies can experience an ROI of 100 to 400 percent and payback as fast as three to six months. While every case is unique, these potential benefits should put OAS on the radar of every asset-intensive organization.
APM is a key process in ARC’s Asset Lifecycle Management (ALM) model. For a complete description, see APM and ALM
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