How SAP Leonardo Can Help Utilities Build Smarter Grids
How SAP Leonardo Can Help Utilities Build Smarter Grids
SAP Leonardo is SAP’s digital transformation engine. It is design-thinking driven methodology coupled with the latest technologies driving new solutions built on the SAP Cloud Platform. It is designed for companies to rethink business processes, find more efficient ways of doing things, and seek undiscovered revenue streams.
With sensor-based data, there is a wealth of ways that SAP Leonardo can be applied in Enterprise Asset Management. This is a first in a series of posts where we will examine by industry the types of use cases that SAP EAM customers can find with SAP Leonardo. This time around, we will be looking at how the Utilities sector can take advantage of the set of methodologies, technology, and solutions with a Smart Distribution Grid.
Traditional Maintenance Strategies
Many of our current electric distribution grids use decades-old substations and distribution lines. These outdated assets provide limited to no data, are to expensive to retrofit, and don’t provide an accurate view of network activities.
To monitor these older assets, utilities have traditionally taken a condition-based maintenance (CBM) approach—meaning they wait for an issue to arise to apply a fix. This is certainly better than no solution, as it does provide a significant amount of data on the health of the asset. However, it can be inaccurate at times leading to false alarms. There also can be hidden costs in solution deployment. Finally, the data is largely unusable for advanced and predictive analytics, and the solutions are typically only monitoring sections of the circuit.
While utilities have managed to run with these methodologies, they also leave them more susceptible to major events like equipment failure and inclement weather. Having a better view of the overall health of assets through data is the ideal state for optimizing their lifecycle and functionality.
Enabling the Smart Distribution Grid with SAP Leonardo
With a Smart Distribution Grid, which can be built with the help of the SAP Leonardo solution, smart sensors collect asset data which is then processed through a central asset data hub builton the SAP Cloud Platform. Using predictive algorithms, the data tells us when the assets need to be worked on. Then maintenance notifications are sent, and work orders are created through SAP’s digital core—meaning SAP S/4HANA.
This is tremendously valuable. Predictive maintenance can reduce costs by 10 to 40 percent versus traditional CBM. Downtime is also reduced dramatically—50 percent, as we aren’t waiting for an asset to break down before fixing it. Overall, we expect this can reduce equipment and capital investment by 3 to 5 percent just by extending the life of current assets.
Beyond the maintenance cost reduction, the Smart Distribution Grid can limit the need for physical bank inspection. That minimizes operations and maintenance efforts. On top of that, there is less necessity to retrofit all assets as with CBM, because sensors can be installed strategically. The smart sensors themselves are relatively easy to install, as they quickly clamp onto lines. That leads to a safer process for linemen. The smart sensors are also battery free, so they do not require reoccurring maintenance.
On the IT side, there is no need for custom programming for each sensor—each can operate with the same code. The Big Data platform built on SAP Cloud Platform also enables theexploitation of existing CBM data with or separately from real-time sensor data using predictive algorithms.
SAP Leonardo as the Driver
Putting together a smart distribution grid can drive efficiency and cut down costs, but it does require new technology such as Big Data capabilities and predictive analytics. SAP Leonardo can be the driver to those new technologies, providing a methodology for implementing them as well as the technological platform to build solutions.
At Vesta, we are an SAP Leonardo IoT accelerator partner with extensive experience in Utilities. Contact us to help make your gird smarter and your maintenance more efficient.
In his book “The Real Truth about Success” Garrison Wynn says this:
“You must be willing to get real about how you are viewed by others, accept how they see you, and get past how you want them to see you. Perhaps some people can effectively change the way others perceive them, but it is much easier, much more realistic and effective, to understand how you are viewed and find a way to make it work for you. We have to understand what other people see when they see us.”
So, that leads to the question, …
…“What does our company’s executive management see when they see us?” Do they see a technical wizard? Do they see a great engineer with marginal interpersonal skills but with no real business management vision? Do they see a great financial manager, a person who always has all their budget numbers right on target with no interpersonal skills?
Have we ever thought about career paths for reliability/ maintenance managers?
How much does our executive management’s perception of us steer us toward a certain career path?
How often are reliability/ maintenance managers perceived as technical wizards and their career path is to the top level of their department and it is at a “dead end”.
Not that there is anything wrong with that from a career perspective – many individuals can have a financially and personally rewarding career in that position. However, how often do we see a plant manager evolve from the reliability/ maintenance leadership position? While it does occasionally happen, it is unusual to see. Is perception reality for senior executives making these decisions?
What if we have a hybrid individual that has a degree in engineering, but never developed the interpersonal skill necessary to be a leader. Does this perhaps lead the individual to a career path in engineering, becoming a great design or project engineer? There is nothing wrong with setting that as a career path. But again, how often do we see strong technical people chosen for a leadership role in the organization, when they don’t have strong leadership skills? Is perception reality for senior executives making these decisions?
Finally – why are we discussing this subject? For two reasons. The first is many of our current reliability/ maintenance/ asset management leaders are nearing (if they are not there already) retirement age. Who will (a) fill their current roles? And (b) move into leadership roles that are being created in other parts of the organization (operations, engineering, division or corporate level)?
Secondly, what about the asset manager’s role? As more and more companies move toward ISO-55000 or an asset focus business strategy, who will take that leadership position in their organization? Should it be accounting? Operations? Supply Chain? Or Reliability/ Maintenance?
Your company’s perception could soon become YOUR reality.
In our last blog, we discussed the reasons for failures of CMMS/ EAM systems to produce the results for which they were purchased. In this blog, I would like to take a different focus –The impact a CMMS/ EAM system has on Asset Management. How are the two interrelated? Consider (from the previous blog) the common reasons CMMS/ EAM systems fail:
Lack of management support (55002 – 5.1)
Lack of business processes to support the system (55002- 5.3)
Insufficient staff to properly utilize the system (55002-7.5)
To understand how these four reasons impact asset management, we first need to understand why the EAM system is important to asset management. (For the sake of this blog, we will focus on physical assets.) In the ISO-55000 document, section 2.4.1 mentions the need for analytical approaches across the life cycle of the asset. The life cycle of an asset begins with the conception of the need for the asset through to the disposal of the asset.
The conception of the need for the asset implies that there is a business need and the purchase of the asset will add value to the organization. It could be that there is a market demand for a product we are producing and our current asset base cannot meet the demand. It could also be that the assets we current have are aging and are no longer capable of meeting the existing market demand. A third reason may be that the business processes for the life cycle activities of the asset are inefficient and ineffective, resulting in excessive maintenance, repair and refurbishment expenditures. (The ISO sections are mapped to this list)
For the sake of the brevity of this blog, let’s focus on the second item: the business processes for the life cycle activities of the asset are inefficient and ineffective, resulting in excessive maintenance, repair and refurbishment expenditures. Various publications state that up to 95% of the life cycle costs of a physical asset are incurred in the operational and maintenance phase of a physical asset’s life cycle activities. An organization’s failure to allow inefficient and ineffective operational and maintenance procedures to exist will have a negative impact on the value that the physical asset will provide the organization. This indicates there is a significant financial impact that reliability/ maintenance policies and practices can have on the cost to manage an asset or asset portfolio.
Now continuing this line, what is likely to happen to the organization’s maintenance expenditures if there are poor business processes in place when a CMMS/EAM system is implemented? Don’t these poor practices become “institutionalized” locking in higher than necessary maintenance and repair costs? Consider the impact that a reactive reliability/ maintenance organization can have on maintenance and repair costs.
A reactive reliability/ maintenance organization will have a “hands-on” time of about 20%. A proactive organization with good planning and scheduling processes may achieve 60%. This basically triples the amount of reliability/ maintenance activities that they perform: ultimately lowering the reliability/ maintenance expenditures necessary for the asset to achieve the business goals it was purchased to achieve.
This is only one example of how CMMS/ EAM systems are needed to support Asset Management and how improper CMMS/ EAM system implementations can impact asset management. We could list many additional examples. However, if organizations don’t have CMMS/ EAM systems implemented correctly, delivering the data necessary to manage their assets, they will surely fail at asset management as they have at implementing and utilizing their CMMS/ EAM systems. It is no wonder the failure to learn from past mistakes will continue to give managers a headache.
Ever been involved in a major systems replacement or change program?
I have! Memorable journeys all of them. The initial excitement of the challenge, the frustrations of the build, the stress of the cut over, and the satisfaction of a successful go-live. Then the fun really started! Remember all of those benefits? You may not have promised them, but there is a fair chance that you are going to be expected to deliver some at least; and in my experience, asking management to hold its collective breath for a year, while it all sorts itself out, just doesn’t cut it. You need managements continued support, but how do you get it? You are going to need something tangible and that’s where the reporting and metrics come in.
It’s not surprising that a business needs to know how it is performing. What is surprising is that many businesses don’t do a very good job of identifying the right things to measure and putting in place the appropriate business processes to ensure what they do measure, is accurate and relevant.
You may not even start with a clean slate. More often than not, most of your initial data is going to simply be what was available before. If it was good you’re in luck, if not, well now you just have another problem because all the good work you have done may be constrained by that same poor quality data.
While we might not like it, we know that measurement is essential. You need it to determine goals, establish performance, observe trends and track improvements. So once you have decided the things you are going to rely on to objectively state performance facts, (the kpi’s), you need to have a good look at the data you are using to assess them. Data is often overlooked and not recognised as the “business asset” it really is. Implementing a set of metrics around the data, (measuring the measurements) is not such a silly idea at all. In fact if you aren’t doing it, there is a very real chance those kpi’s are going to become very beastly, as will the managers that might be accountable for them. Developing a suite of metrics around data that check its quality (typically accuracy, completeness, relevance, currency etc.) to either make sure it is good, or if not, drive business processes changes to fix it, actually makes a great deal of sense. Once we have confidence in our data, reporting become easier and kpi’s can be relied upon.
There is a whole other story about lagging or leading kpi’s and whether they measure process or outcomes. Rather than wake the beast again we will leave that discussion for another day.
The following is an excerpt from the “Preparing for Asset Performance Management (APM)” White Paper by Geoff Taggart
“SAP EAM provides an excellent tool to allow the planning and scheduling of preventative maintenance, the management of reactive and refurbishment work, and the capture of the history of work carried out on the asset.
Work history includes key reliability data such as breakdown information, asset availability and failure codes and cause of the damage. It also contains key asset condition and performance information such as measuring documents which can be used to show deterioration and condition of the asset. Work history also contains key financial information such as the cost of repairing the asset. This is all key data which can be used to tell asset managers exactly how assets are performing and what they are costing to maintain. The question must be asked “is this data being used to its full potential?”
Whilst SAP EAM is good at the planning management and recording of work on our assets, it does not allow predictive analytics to be performed. Predictive analytics allow asset managers to be able to improve reliability and availability. SAP EAM does not provide data modelling functionality. Maintenance operations have a finite budget to plan which assets to refurbish, replace or plan new capital investment. It is therefore essential that they have a means of making the best decisions for the business based on accurate performance and condition information.
Asset investment managers need to run models based on the asset condition and performance data that is collected by maintenance management systems, to ensure that the correct assets are repaired or replaced, to ensure that the maximum improvements in reliability and availability are made, drive down operational and reactive maintenance costs and make sure the quickest and maximum return on the investment can be achieved.
It is clear that Asset Managers and Asset Investment Managers need more than the standard maintenance management systems currently provide. But how can this be achieved? The answer is through Asset Performance Management (APM). There are a number of APM solutions in the market place that are capable of using the wealth of asset information that asset intensive organisations collect as part of day to day operations. APM solutions can give both, Asset Managers and Asset Investment Managers the ability to run predictions, projections and perform models on the data held in SAP to provide the following benefits:
Improve asset reliability
Improve asset availability
Drive down the costs of reactive maintenance
Drive down the costs of operational maintenance
Maintain assets with the minimal maintenance
Improve the amount of asset that can be maintained
Ensure the correct assets are repaired or replaced
Better mid and long term asset investment planning
Achieve the quickest return for asset investment
To get the maximum benefits from APM solutions, it is essential that maintenance organisations prepare correctly for the implementation APM. Failing to do so will minimise the effectiveness of these products, and the associated benefits that can be achieved from adopting them. This White Paper outlines the steps required to prepare for APM to achieve the maximum benefits both in terms of asset management and asset investment from the APM solutions.”
Click here to read the full version of the “Preparing for Asset Performance Management” White Paper
“The past is the future; the future is the past: it all gives me a headache.”—This quote is taken from a Star Trek Voyager episode. Consider how Captain Janeway could apply this to reliability/ maintenance managers today.
Consider this: How many “new” processes and procedures actually have been created in the area of maintenance and reliability in the last few years? Are the latest “buzzwords” simply new names for processes and procedures that have existed for decades? Preventive Maintenance, Reliability Centered Maintenance, Life Cycle Costing, etc.—many of these types of processes can be traced to the 1960s—maybe earlier. Consequently, the practices and processes that many companies are now planning to implement in the future actually have existed in the past.
Even Computerized Maintenance Management Systems (CMMS), which provided the foundation for many current Enterprise Asset Management (EAM) systems, have been implemented since the mid-1970s. While those early systems may not have utilized all the technologies to enhance the “user-friendliness” inherent in today’s systems, but they still supported good maintenance business processes.
If we focus just on the CMMS/EAM aspect of the maintenance and reliability market, what do surveys tell us about the implementation and utilization of our current systems?
Most studies show that today’s CMMS/EAM systems are not being implemented properly; that they are not being utilized once they are implemented; and, that they are not delivering the returns they were projected to achieve. There are many common reasons why, including:
Lack of management support for and understanding of the CMMS/ EAM project
Lack of organizational business processes to properly utilize the CMMS/EAM system
Insufficient implementation resources
Insufficient personnel to utilize the system
We’ve been watching CMMS/EAM systems fail for these and related reasons for years. Why, then, would we let another implementation fail? Can’t we learn from the past?
Do companies believe their implementations are so unique that they can’t learn from the successes and failures of others? Would this type of shared information not help a company optimize its investment in a CMMS/ EAM system?
In industry publications and studies (especially at https://reliabilityweb.com/ ) , CMMS/EAM system implementation is an especially hot topic, and it has been covered from almost every possible angle. Yet, despite the overwhelming information available, why has the percentage of perceived successful implementations still hovered at 50% or less?
How much money are companies wasting by making the same mistakes time after time—year after year? Since expense dollars not spent become profit dollars, what we should ask ourselves is: “How much of our company’s profit are we wasting by repeating documented historical mistakes?”
With so many educational resources available today, there’s no excuse for repeating the same historical mistakes in the selection, implementation and utilization of CMMS/EAM systems. If nothing else, we could find ways to make new mistakes. (This also holds true for other types of maintenance and reliability processes)
So, where does your company stand in its current CMMS/EAM efforts? In the past or in the future? To paraphrase that television show, just thinking about the question could be enough to bring on a headache! It is one headache that many reliability/ maintenance managers should be able to avoid.