Integrative Improvement Blog

The integrative improvement blog discusses and provides commentary on the latest topics in the business performance improvement sector.


3 unexpected benefits of a data-driven approach to asset utilisation

3 unexpected benefits of a data-driven approach to asset utilisation

To improve ROI and respond to customer demands for faster supply at lower cost, many companies are required to run their manufacturing plants 24 hours a day, seven days a week. They are squeezing every last drop of availability and capacity from their assets. And for most manufacturing industries, improved asset utilisation is directly linked to improved profitability.

Asset utilisation equates to site capacity. Making the assets work harder will always lead to some form of productivity improvement. There are always ways to make money through increasing site capacity – even if there is no additional sales volume available. So ‘ready to serve’ will continue to be a necessary site activity, but, for the business, improving asset utilisation is manufacturing’s number one responsibility.

Asset utilisation directly contributes to the bottom line by helping you confirm whether or not equipment is performing at peak availability, performance and quality. Operators can tell exactly how their equipment is operating; they know where to focus reliability improvement efforts to drive the highest overall equipment effectiveness (OEE). (Read how Polish company Can-Pack S.A. increased OEE by almost 20% in less than two years.)

The extent to which asset utilisation is beneficial depends on the business model, but research has revealed one important conclusion: whether average asset utilisation is low or high, companies that have improved on it delivered, on average, 7.6% more value to shareholders per year than those with declining asset utilisation. But although asset utilisation projects are relatively common, only 20%-40% are really successful.

Creating your plan for improved asset utilisation will require some form of benchmarking, loss accounting and a sound business case. Until you know your current performance – what is possible and its impact on the business – you cannot move on to the next step of the journey. It also requires that the right data is collected through effective practices which are then embedded throughout the asset lifecycle.

Unexpected benefits of a unified data model

Currently, many systems analyse big data and disseminate reports and insights, but the demand for better collaboration requires a more cohesive, interchangeable system of accountability. This will lead to the creation of more metrics and business intelligence tools to help improve manufacturing operations.

Asset utilisation data offers a range of benefits that go far deeper than its core uses, such as real-time visibility. Businesses that have more advanced data collection strategies have discovered that they can make better long-term decisions in terms of asset design and cost-saving measures. What’s more, they can unlock even greater ROI and operational performance into the future.

The use of big data in particular delivers new insight which enables alignment across various functions. And with the right approach, you can unlock three additional ways in which you can apply your data to reach new goals and improved performance:

1. Avoid or defer capital expenditure

Asset utilisation data can be used to extend the useful life of capital equipment for greater return on assets and deferred capital investment. This is of particular significance in manufacturing, where operators can identify usage behaviour and settings for highest throughput at lowest cost. It also eliminates the perception that more equipment is needed for yielding greater volume, as asset utilisation data can help you do more with what you’ve got, thereby saving on future capital expenditure.

2. Expose underutilised assets in real time

Internet of Things (IoT) systems can collect an asset’s relevant telemetry, related data and status against utilisation metrics, so that underutilised assets can be swiftly reallocated. Operators can even receive alerts via email, SMS or other means when an asset isn’t being used.

3. Design better equipment

By having a history of asset utilisation data, equipment manufacturers can better understand how their products are functioning in real-world customer installations and then use that information to inform future enhancements.

Asset utilisation will play a growing role in the fourth industrial revolution. And while the immediate goal of your asset utilisation deployment might be to ensure higher OEE, there is a broad range of capabilities to explore beyond this business goal that will unlock additional cost savings and revenue. Above all, a picture of your machinery health and other related data will always be just a few taps away.

 

About TRACC
The TRACC framework helps organisations build standardised and integrated good practice and performance capacity across their Plan, Source, Make and Deliver functions. Simultaneously it accelerates their collaboration and alignment capacity to build world class end-to-end value chains, enabling the organisation itself to become the ultimate source of sustainable competitive advantage.

 

Sign up to our monthly TRACC Community newsletter for CI insights, interviews and news!