Month: March 2021

Assets are essential to the valuation and operation of a business. Understanding how assets contribute to (or detract from) the bottom line helps organizations make strategic business decisions.

The maintenance team plays an important role in preserving and protecting the assets that enable the business to succeed. This article provides an overview of assets and the role maintenance plays in managing assets that promote positive business growth and performance.

Learn more about maintenance management.

What is an Asset?

In financial accounting, an asset is a resource with economic value that is bought or created to provide value or benefits to an organization. Maintenance management is responsible for what are called tangible assets.

Tangible assets are assets that can be physically touched, such as buildings, machines, and furniture. They are also called “fixed” assets because, in addition to being physical items, they are long-lasting and not consumed in the normal order of business, making them permanent fixtures of the business.

The assets serviced by maintenance are referred to as “property, plant, and equipment” or PP&E. Property refers to land and buildings. Plant describes places in which goods are manufactured. Equipment includes the apparatuses used to produce goods or deliver services. The following section contains examples of these types of assets.

PP&E assets fall under the scope of maintenance management because they must typically be maintained and are, with the exception of land, regularly repaired or replaced. For example, an organization might repair a leaky roof or replace a worn-out conveyor system.

Types of Assets

There are several types of assets that can be categorized as fixed assets. Depending on the industry or organization, maintenance teams are responsible for servicing one or more of the following types of assets.

Land

As an asset, land is an owned, bounded piece of earth. Land includes the animal and plant life, bodies of water, minerals, and other natural resources on it.

Unlike other types of assets, land is considered to have unlimited use and doesn’t require the same type of maintenance as other assets. Maintenance performed on land assets are usually related to cosmetic or environmental concerns. For example, mowing the lawn improves the appearance of land. Landscaping or grading mitigates water drainage issues.

Buildings, Facilities, and Properties

Buildings and facilities include any permanent structure that is part of a business. This ranges from standalone office buildings to manufacturing plants comprised of many buildings. Building and facility assets also include structures like parking lots, garages, pavilions, and so on.

Property is considered land and/or any buildings on it. For example, corporate farms maintain land that does not contain buildings. On the other hand, apartment complexes and college campuses are also examples of property.

Furniture

Furniture generally refers to items used to support human activity. It is movable, meaning it does not have a permanent connection to the building or structure. Examples of furniture include bookshelves, desks, and storage racks.

Fixtures

Fixtures are assets that are physically attached to a property that cannot be removed without causing damage. Lighting, HVAC systems, toilets, and sinks are examples of fixtures.

Equipment and Machinery

This wide-ranging category includes any implements used in business operations. Equipment and machinery assets vary depending on the industry. For example, a manufacturer’s machinery assets may include lathes, presses, and conveyor systems. Facility equipment includes elevators, pumps, cleaning apparatuses, and lab equipment. Service providers use vehicles and specialized tools, which may be considered equipment or machinery assets.

Tools

Tools include items such as manual or powered drivers, saws, and hammers that make tasks easier. Many tools are simply replaced when they break, while expensive or specialized ones might be repaired. Tools are not to be confused with tooling, which are accessories mounted to a machine to make a specific item.

Vehicles

Vehicles transport people, products, materials, and equipment. Company vans, semi-trailer trucks, airplanes, and forklifts may be considered vehicle assets.

Why Do Assets Matter?

People generally get into business to make money; assets enable companies to do so. Companies purchase (or lease) assets at a cost and use them to produce goods or services which, in turn, generate revenue.

Assets are also an indication of a company’s value. Organizations that are earning money continue to grow through the addition of new assets or by optimizing the use of existing assets. A thriving business is an attractive opportunity to investors who may further inject funds into the business to help it grow.

How does maintenance management impact assets? The maintenance team is tasked with maintaining a company’s assets. To do so, the maintenance team must have sufficient information about assets available, such as their location and condition. Using this knowledge, maintenance teams create care plans that ensure assets are kept in optimal working condition.

Asset Management

An organization’s well-being is directly tied to its assets. Therefore, it is essential that organizations understand how much assets cost to purchase and maintain, their condition, and whether they are still working. Based on this information, organizations make decisions about their assets with the end goal of reducing costs and increasing revenue.

Asset management is the process of maximizing the value an asset provides in the most cost-effective manner. Asset management goes beyond just counting assets. It includes capturing data about an asset’s identity, location, specification, condition, maintenance, and cost.

Why is asset management important? Companies use asset data to evaluate whether assets provide value or are a net liability. The better a company manages its assets, the greater return they will receive from their investments. Below are a few ways businesses use data to manage assets.

Asset Tracking

Asset tracking is the process of documenting an organization’s assets. It involves recording information about each asset such as its name, serial number, manufacturer, cost, assigned owner, and other important information.

Asset tracking provides you with a vision of your assets. The process of documenting assets helps you identify the scope of assets you own and may even reveal assets that you either forgot about or never knew you had. Recording location data keeps assets secure by tracking their movement and preventing theft.

During documentation, assets are named according to an asset naming convention. They are given unique alphanumeric names along with brief descriptions. Identifying assets in this way ensures the same asset is not counted twice and that maintenance activities can be linked to a specific asset. This is especially useful when many similar assets exist.

Assets are also tracked via tags physically affixed to the physical asset. Asset tags typically include barcodes or QR codes. Using specialized software, asset tags can be scanned to provide real-time information to the maintenance team. Tags that incorporate Global Positioning System (GPS), Radio-frequency Identification (RFID), and Near Field Communication (NFC) technologies broadcast an asset’s location.

Asset Maintenance

Having comprehensive asset data allows the maintenance team to create appropriate care plans for a company’s assets. Factors such as current condition, criticality, maintenance history, and risk of failure help determine which maintenance strategy is used. Other factors, like downtime, meter readings, part availability, and cost to repair also determine what tasks are performed.

Maintenance strategies are either reactive or proactive in nature. With a reactive strategy, maintenance is performed after a failure has occurred. Proactive maintenance addresses the underlying conditions that lead to failure so that breakdowns can be avoided. For more information on maintenance strategies, read our article about the various types of maintenance.

Asset Depreciation

Depreciation is an accounting convention that allows organizations to more accurately spread out the cost of an asset over its useful life. The useful life is based on information provided by the manufacturer, assigned by the Internal Revenue Service (IRS), or approximated by a user.

Tracking depreciation allows the company to track how much assets are worth based on their expected useable life. In reality, an asset’s useable life is longer than what is typically accounted for via depreciation. This allows the company to generate income after the asset has been taken off the books.

Proper maintenance further extends an asset’s useful life. Maintenance management uses asset data to evaluate an asset’s condition and create an appropriate maintenance plan. Using computerized maintenance management system (CMMS) software, maintenance teams can efficiently plan and schedule maintenance activities.

Repair vs. Replace Decisions

Repair vs. replace decisions take into account an asset’s current value, useable life, and repair and replacement costs. Assets generally degrade over time. New assets are more valuable because they have been used less. Older equipment has less value due to extended wear and tear. When assets fail, organizations evaluate whether repairing or replacing the asset is more beneficial and cost effective.

The maintenance team identifies assets that are candidates for replacement. They may alert management of costly repairs and when maintenance costs on a particular asset are steadily rising. Based on the asset’s maintenance history, expected vs. actual usable life, and other asset data, the maintenance team makes a case for replacement or repair.

Further Reading: Asset Management KPIs

Asset Management Software

Manually documented asset data is prone to errors and inaccuracies. Assets are likely to be misidentified, creating duplicates or “ghost” assets that are documented but don’t truly exist. In addition, it takes too much time for employees to sift through asset data by hand.

To resolve these issues, organizations use computer software to track asset data. Spreadsheet software, such as Microsoft Excel, is a popular solution, but lacks the capabilities of dedicated asset management software. Ideally, asset data is documented in a CMMS or enterprise asset management (EAM) software.

CMMS software is specialized for maintenance management while EAM solutions can be used to monitor assets throughout their entire lifecycle. However, the lines between CMMS vs. EAM are becoming fuzzier.

Manage Assets with FTMaintenance

FTMaintenance is a CMMS solution that allows you to easily store, manage, and report on your company’s equipment and facility assets. Providing robust asset tracking and work order management features, FTMaintenance allows you to identify, monitor, and track asset maintenance. Request a demo today to see how FTMaintenance makes it easy to manage your assets.

An equipment bill of materials (EBOM) is extremely useful for asset-intensive organizations that rely heavily on proper asset and spare part management. However, creating an EBOM requires time, money, expertise, and a commitment from management, any of which may be lacking in a given organization. Further complicating the issue, valuable asset data is often scattered across several locations, in various electronic and hard copy formats, rather than stored in one place and format.

Despite these challenges, organizations must make a choice: either invest in the resources needed to build an effective EBOM and improve operations, or continue to suffer the consequences that arise from poor asset management.

This article is intended for organizations practicing robust asset management. It guides you through the process of creating, managing, and maintaining equipment bills of materials (EBOM). Organizations that require a simple bill of materials, such as one that will primarily be used for maintenance purposes, should read our companion article, How to Create a Maintenance Bill of Materials.

Note that throughout this article, we refer to an equipment bill of materials as an equipment bill of materials, EBOM, or equipment BOM interchangeably.

What is an Equipment Bill of Materials (EBOM)?

Within your organization, there may be a number of bills of materials (BOMs) that serve different audiences, such as engineering, asset management, manufacturing, and maintenance management. Each of these contains varying levels of detail, depending on who uses the information and how it will be used.

Typically, an equipment bill of materials (EBOM) defines the design or make up of an asset, such as a piece of equipment. The EBOM lists every part and material used on an asset, including specification, stocking level, and other features or characteristics.

Questions to Ask Before Creating an Equipment Bill of Materials (EBOM)

Creating an equipment bill of materials can take considerable effort, but is well worth it. There are many long-term benefits a proper EBOM brings, ranging from decreased downtime to simplified parts reordering and optimized stock management. Therefore, a systematic approach to EBOM creation ensures your time and effort are used efficiently.

The following questions prepare you for EBOM creation and make the process more manageable when the “real work” begins.

Who needs to use the EBOM?

Many parties throughout the organization may use the equipment bill of materials. Therefore, effective EBOMs contain relevant information for all stakeholders.

Think about which stakeholders will interact with the EBOM and how they will use it. Some examples are provided below. Keep in mind that a stakeholder’s role and responsibilities are unique to each organization.

Conduct an informal interview with each stakeholder to better understand what information they desire to see. Their responses will also help you identify the appropriate EBOM structure, as described in the next section, as well as what data should be included on the EBOM, discussed later.

How Should the EBOM be Structured?

Depending on the level of detail required, an equipment bill of materials may take many forms. Typically, EBOMs follow either a single-level or indented multi-level structure.

A single-level EBOM simply lists an asset’s components and spare parts. Each part is listed only once along with its total quantity for the asset.

A multi-level EBOM shows the hierarchy between an asset’s assemblies, subassemblies, and components. These parent-child relationships are usually visualized through indentation, showing which components “belong” to – or are organized “under” – each other. Unlike a single-level EBOM, parts in a multi-level EBOM are listed every time they are used by their parent item.

The feedback you receive from stakeholder interviews will help you determine which structure to use.

What System Will Be Used to Create the EBOM?

Due to the amount of information that will be included, think carefully about the best way to document and create the equipment BOM. Using paper and pencil will not work, as handwritten information is not easily edited and will likely need to be entered electronically to be useful anyway. Spreadsheet programs such as Microsoft Excel are popular and great for data collection and organization, but have limited collaboration capabilities, lack automation, and are cumbersome to use.

Many organizations build EBOMs using a computerized maintenance management system (CMMS). In fact, many CMMS solutions provide automatic EBOM creation, which streamlines some aspects of EBOM creation, maintenance, and management. Further, the speed, accuracy, and convenience of using a CMMS for EBOM management are far superior to other methods. Enterprise asset management (EAM) software may also be used.

Further Reading: What’s the Difference between CMMS vs. EAM Software?

EBOM Creation

The process of creating an equipment bill of materials involves multiple steps. When done in a systematic fashion, such as the process described below, EBOM creation is efficient and produces high quality results.

1. Determine which Assets need an Equipment Bill of Materials

In this first step, identify which assets need an equipment BOM and in what order you will create them. If you find that a large number of assets will benefit from an EBOM, you must prioritize EBOM creation. Start with the most critical assets. Critical assets are those that are integral to business operations and cost the most when they fail. Therefore, you will make the most impact by focusing efforts here first.

Once completed, you can repeat the EBOM creation process for similar assets, and assets that share the same assemblies, subassemblies, and parts. Depending on your organization, industry, and type of assets you own, one EBOM may cover multiple identical assets.

2. Decide what Items to Include on the EBOM

Set the parameters of what will and won’t be included on the EBOM. For example, if EBOM is created for the sake of making the maintenance team more efficient, you don’t need to list every nut and bolt that makes up the asset. In this case, only regularly serviced and replaced components may be listed, along with critical spares. EBOMs in highly specialized or heavily regulated industries may be required to contain more detail than in a standard maintenance organization.

At a minimum, include the following:

• Critical spares
• Anything that is reasonably expected to be repaired or replaced
• Anything for which it is beneficial for usage history to be tied to the asset

Stakeholder interviews also provide guidance as to what items are necessary to include.

You may have noticed that absent from this list are consumables such as towels, rags, gloves, and other supplies. While these items are used to perform maintenance, they are not part of assets themselves, and are therefore omitted from the EBOM. Work orders are a more appropriate place to identify what is needed to complete maintenance jobs.

Learn what should be included on a work order.

3. Determine what Data to Include on the EBOM

Finding the right amount of detail to include is important to the success of the EBOM. There is a delicate balance between providing enough information that the EBOM is useful, but not so much that is causes confusion. Conversations with key stakeholders should shed light on what information is important to have available.

At the most basic level, identify the part or component being used. This usually includes the item number and item name. Based on your organization’s needs, other information may be included. Below is a list of commonly used categories of information:

• CMMS part number
• Part number
• Part name
• Description
• Revision number
• Unit of measure
• Size
• Length
• Weight
• Quantity required by the asset
• Manufacturer
• Manufacturer part number
• Authorized substitutes/alternatives
• File availability (e.g., availability of drawings, CAD files, etc.)
• Other specifications or features

Information that is not available on the EBOM should be easily accessible in the CMMS. CMMS software centralizes maintenance data, and links important asset and inventory information together. This makes it quick and easy for users to navigate to appropriate records to find accurate information.

4. Collect Inventory Item Data

Effective equipment bills of materials rely on comprehensive, accurate data. Unfortunately, many organizations struggle with their data tracking practices. They either don’t track maintenance activities, have some data but don’t know if it’s accurate, or have data but lack the resources to do anything with it. Additionally, maintenance teams often do not reliably enter data in a CMMS or other maintenance management system.

Due to these reasons, data collection may be the most time-intensive step in the process. With that said, don’t overexert yourself trying to collect all the data at once. Refer to your prioritized list of assets from earlier and collect information for the most critical assets first. EBOMs for less critical assets can be created later, as long as they are done eventually.

Asset data can be obtained from multiple sources including:

• Equipment manuals provided by the original equipment manufacturer (OEM)
• Equipment suppliers or other vendors
• Drawings, schematics, and catalogs
• Similar assets and equipment
• Engineering change notices and redesign documentation
• Current or planned preventive maintenance (PM) work orders
• Previous unplanned work orders
• Work order history records
• Personal lists or cheat sheets
• Equipment nameplates
• Physical asset inspections
• Veteran employees and other “go to” workers

During data collection it is acceptable to store data in a spreadsheet. This information can be easily transferred into a CMMS after your data collection and review phase.

5. Review EBOM Data

As you collect data, take the opportunity to perform some “clean up”. You are likely to find information that is out of date or obsolete. If you encounter discrepancies, cross-check between multiple sources to ensure the most up-to-date information is being used. It is imperative that data is accurate because after this step, you will enter it into the maintenance management system for use by you and your team.

Read Also: CMMS Data Transfer Best Practices

6. Enter the EBOM Data in the CMMS

In this final step, enter inventory part data into the CMMS or other system. Some CMMS systems can automatically import part data, while others require you to do it manually. Either way, data entry should be performed by someone familiar with the CMMS who can accurately enter data into the required fields.

EBOM Maintenance

Equipment bills of materials are not “set and forget.” There are a number of events that require EBOMs to be updated in order to maintain their accuracy. Consider the events described below:

• Asset decommissioning and retirement: When assets are taken out of use and/or dismantled, an accurate EBOM identifies which parts are unique and can be sold or scrapped. Parts used elsewhere can be put back into inventory.
• Asset design changes: Assets that have been redesigned, refurbished, or otherwise modified may use new and different components. These items should be included in the EBOM, along with any alternatives.
• Part substitution: Due to availability issues, there exists a need to identify alternative parts that are viable substitutes. The EBOM or part record in the CMMS can show this relationship.
• Part standardization: To streamline inventory procurement and purchasing, parts may be standardized across similar assets or across plants. Amend the EBOM to show these changes, including effective start and end dates of new parts.
• EBOM review: EBOMs may go through informal or formal review throughout their lifetime. Informal reviews may happen as EBOMs are being used by those with specific knowledge about the asset. More formal reviews may be performed periodically by key maintenance stakeholders.

EBOM Management

To remain effective and accurate, EBOMs require a formal change management process. An out-of-control process – one in which anyone is allowed to make changes, changes are made without approval, or changes are made infrequently – can lead to disaster. Below are some EBOM management tips:

• Set clearly defined responsibilities and expectations for users. Make sure each person knows their role in using, maintaining, and managing the EBOM.
• Decide who is responsible for making changes to the EBOM. It is undesirable for everyone to be able to make changes. Limit editing capability to a small number of people.
• Ensure everyone is using the most up-to-date EBOM. Clearly label the EBOM, including titles, version numbers, and page numbers to reduce problems caused by using out-of-date information.

If your organization requires more intensive file change management, consider the following:

• Maintain a version history. Keep a copy of all versions of the EBOM in case you need to roll back to a previous version.
• Use a change log. A change log records what changes were made, by whom, and when. This makes it easy to identify what has changed from version to version. It also holds editors accountable for information added to or removed from the EBOM.

The activities described above are quite manual. A good CMMS automates EBOM maintenance and management activities. Some systems automatically build EBOMs when parts are issued against assets on a work order. In addition, updates to part records only need to be done once for it to be affected throughout the system. Although errors may occur less frequently when using an automated CMMS, EBOMs should still be closely monitored.

Manage Assets with FTMaintenance

FTMaintenance CMMS software is an optimal tool for organizing and tracking asset information, including equipment bills of materials. It provides a platform for tracking robust asset and part information, including the ability to see where parts are used and to what jobs they are assigned. Request a demo today to learn more about how FTMaintenance improves asset management.

Even though a bill of materials (BOM) makes maintenance operations more efficient and effective, many maintenance teams go without one. Often times, the absence of a BOM comes down to a lack of time, money, patience, expertise, or personnel available to build it.

To compensate, technicians, planners, and other stakeholders must find workaround solutions to complete routine tasks. This leaves organizations with a big decision to make: Should the organization invest the time needed to build a bill of materials for each of their assets or continue to deal with the consequences of poor spare part and asset management?

When you consider the impact of a bill of materials on asset reliability, the advantages are clear. Quicker maintenance and repair times, fewer errors, and simplified parts reordering reduce production downtime and other maintenance costs. Therefore, we strongly recommend that organizations that have no or incomplete BOMs create and/or update them.

This article is intended to help organizations create a bill of materials for maintenance purposes. Organizations engaged in enterprise asset management may require a more comprehensive bill of materials that meets the needs of stakeholders outside of the maintenance department. For details, read our article about how to create an equipment bill of materials (EBOM).

What is a Maintenance Bill of Materials?

Within your organization, there may be a number of bills of materials (BOMs) that serve different purposes and stakeholders, such as engineering, asset management, manufacturing, and materials management. Each of these contains varying levels of details, depending on who will use the information and how it will be used.

Typically, a maintenance bill of materials lists the replacement parts and/or materials that comprise an asset, such as a piece of equipment. These items must be repaired or replaced to keep the asset in working order. In this article, we will refer to this type of bill of materials as a bill of materials or maintenance bill of materials interchangeably.

How to Create a Maintenance Bill of Materials

Compared to other bills of materials, creating a maintenance BOM is quite easy due to its simplicity. For example, an engineering bill of materials may be a comprehensive list of any and all parts and materials that make up an asset, along with other information relevant to other stakeholders. Sifting through this level of detail would surely bog down the maintenance team’s productivity.

In contrast, maintenance BOMs are less formal. Maintenance BOMs can be created according to the following procedure.

1. Consider What Tool Will be Used to Create the BOM

Before you create your maintenance BOM, consider the best way to document the information. Using paper and pencil is not an efficient solution, as handwritten information is not easily edited and will likely need to be entered into an electronic system anyway. Like any other physical documentation, hard copies are prone to get lost.

Spreadsheet programs such as Microsoft Excel are popular and great for simple data collection and organization. However, spreadsheet software has limitations in terms of automation and ease of use. Though the tool is digital, many updates must be made manually, and it takes someone computer-savvy to set up special formatting, equations, and styling. Additionally, information stored in spreadsheets quickly becomes outdated if not consistently updated.

We recommend that you build your bill of materials in a computerized maintenance management system (CMMS). Many CMMS solutions automatically build a BOM when parts are issued against work orders. Automatically generated BOMs provide a base set of information about each part, taking away some of the guesswork and decision–making about what data to include.

As you will see throughout the rest of this process, although not required, a CMMS will provide many advantages as you create your BOM. Whichever program you decide to use, it must be used consistently to reap the full benefits.

2. Decide What Items to Include on the BOM

The needs of the maintenance process determine what items to include on the maintenance BOM. As mentioned earlier, maintenance BOMs often list only a subset of an asset’s parts. This should include all the critical components, asset-specific materials, and components that will reasonably be repaired and/or replaced.

Consumables, such as towels, gloves, and safety equipment, are usually omitted from the BOM, as they are not a part of the asset itself. Even though these items are used to complete maintenance tasks, this information is usually communicated on a work order instead.

Ultimately, a maintenance engineer, maintenance manager, or other relevant employee should determine what types of items are valuable to include on the maintenance BOM.

3. Decide What Data to Include on the BOM

There is a delicate balance between providing enough information to be useful, and providing so much detail that end users cannot find what they need. At a minimum, the maintenance BOM should identify the part or component being used. This usually includes the part’s number and name. Part quantities and usage data are also common data points.

What data is ultimately incorporated will be up to your organization to decide. Based on the system being used to create the BOM, more or less detail may be included.

Manual or spreadsheet-based systems allow you to track an unlimited amount of information. However, too much detail is often included, making BOM creation and updates a burden. For maintenance BOMs, it is often the case that less is more.

CMMS software offer a base set of data fields, which can often be expanded or reduced through configuration or customization. For the most part, the default fields provide enough information for maintenance purposes.

4. Collect Asset Data

Unfortunately, many organizations struggle with their data tracking practices. Valuable maintenance data is often scattered across several locations, and in various electronic and hard copy formats. Luckily, data about what parts are used on an asset can be obtained from multiple sources including:

• Drawings, schematics, and catalogs
• Equipment suppliers and other vendors
• Similar assets and equipment
• Engineering change notices and redesign documentation
• Current or planned preventive maintenance (PM) work orders
• Previous unplanned work orders
• Work order history records
• Personal inventory lists and cheat sheets
• Equipment nameplates
• Physical asset inspections
• Veteran employees and other experienced “go to” workers

Collecting data will be easiest for new assets. Original equipment manufacturers (OEMs) provide comprehensive documentation along with new assets, including an extensive list of spare parts. Data for existing assets can be obtained from one or more of the sources listed above.

During data collection, it is most common to store data in a spreadsheet. Information can easily be transferred into a CMMS when needed. As an added bonus, digital maintenance documentation can be uploaded to the CMMS for easy reference.

5. Review Asset Data

As you collect data, you’re bound to encounter information that is conflicting, out of date, or obsolete. If you encounter discrepancies, cross-check between multiple sources to ensure the most up-to-date information is used. It is imperative that the data you have is accurate. Inaccuracies or working from old information leads to a number of issues. For example, if the wrong part is listed, the correct part will need to be located or ordered. This may result in unnecessary downtime caused by tracking down parts or avoidable emergency shipping charges if a new part must be ordered.

Learn more about MRO inventory management.

6. Enter Data in the CMMS

After gathering all required information, enter part data into the system where the maintenance BOM will exist. If using a spreadsheet, this step will already be complete. If using a CMMS to build the BOM, data entry should be performed by someone proficient with the system that can enter data into required fields.

Once part data is loaded into the system, it must be linked to its specific asset. This is difficult in a spreadsheet; use a CMMS instead. As previously mentioned, many CMMS solutions automatically build BOMs when parts are issued against assets on a work order. Otherwise, you may build BOMs manually.

One advantage of using a CMMS to create your maintenance bill of materials is the ability to view BOMs from a part- or asset-centric view. From an asset record, you can see all the parts included on the BOM. In most cases, the CMMS part record has a “where used” tool, listing all the assets on which that part has been used or assigned.

Read Also: CMMS Data Transfer Best Practices

Maintaining the Bill of Materials

As much as one would prefer them to be, maintenance bills of materials are not “set and forget.” BOM data changes over time, and if changes are not made to an asset’s bill of materials, the wrong parts will be listed. Some reasons BOMs require modification are as follows:

• A supplier provides a new and improved version of a part
• Older parts become obsolete and an alternative is required
• A vendor changes its part catalog name and/or number
• Changes or modifications to an asset’s design require new and different components
• Parts become standardized across similar assets or across plants
• Similar parts are ordered from a new supplier

Managing and tracking changes is a challenge when done in a spreadsheet or other manual system. A CMMS makes maintaining the bill of materials easy. Changes made in a CMMS are only required once and reflected throughout the program. Your team benefits by always using the most-up-to-date information.

Manage Parts with FTMaintenance

FTMaintenance is a CMMS solution that allows you to track maintenance assets and MRO inventory. It offers automated features that allow you to quickly and easily build and manage bills of materials. Along with other powerful CMMS features, FTMaintenance is an all-in-one platform for documenting, managing, and tracking maintenance activities. Schedule a demo of FTMaintenance today.

Work order management is a core function of maintenance management. A successful work order management process depends on how efficiently work orders progress through each stage of their lifecycle. Maintenance professionals use one of many work order management systems today, each with their own benefits and drawbacks.

This article provides an overview of the pros and cons of several common work order management systems in order to help you make the best decision for your organization.

No Work Order Management System

As surprising as it sounds, some organizations do not have a formal work order management system in place. This is typical of small organizations that operate in a completely reactive mode. Depending on the makeup of the maintenance team, veteran technicians determine what maintenance is needed based on their practical knowledge, experience, or “gut feeling.” Employees rely on their memory to know when maintenance is due.

Having no work order management system has no benefits other than cost. Unless maintenance staff has superb memory skills, having any type of organized system is better than having none at all. Without a work order management system, maintenance operations are thrown into chaos. Not only does no one know what work needs to be done and when, it is difficult to hold people accountable. Because of these factors, maintenance costs are high and no useful information is documented to help improve operations.

Paper Work Order Management System

Though using a paper-based work order management system seems outdated, it still thrives in today’s industrial environments. Paper work order management includes communication about maintenance work using non-computerized methods such as paper and pen, sticky notes, bulletin boards, and maintenance tags.

Paper-based work order management has existed seemingly as long as pen and paper has been used. Before computers, many businesses were run on paper-based systems. Their ease of use and familiarity are a large reason why so many organizations still use them today. In fact, operations in many organizations largely rely on printed documentation generated by computerized systems, such as work orders or invoices.

The primary advantage of paper work order management systems is that paper work orders are very portable. Technicians can fold paper work orders, tuck them into a pocket, put them in a folder, or attach them to a clipboard. Paper work orders can also be taken into harsh environments or areas with no internet connection, places where electronic devices may get damaged or become useless. It is also easier for technicians to grip a writing implement with gloves on than to type on a mobile device.

Due to its simplicity, paper-based work order management systems are very limited. Paper work orders are easily misfield, lost, or damaged. It can also be time-consuming to locate, retrieve, and organize them, leading to slower response times. Even if there are only minutes of time wasted, lost maintenance time adds up over time.

In terms of communicating maintenance information, paper work orders are prone to errors. Poor penmanship, misspellings, and misnumberings cause inaccuracies that indirectly impact other aspects of maintenance operations like accurate inventory tracking.

Finally, filing paper work orders requires storage space, which quickly runs out when hundreds of work orders are being processed regularly.

Email Work Order Management System

Another common method of managing work orders is to use email software. Organizations most commonly use Microsoft Outlook, as it comes preinstalled with a Windows operating system. Google’s Gmail is another popular option.

Like paper, email is familiar to everyone, whether used in their business or personal life. Email-based work order management digitizes work orders, making them easier and faster to distribute to employees. Maintenance managers may also attach computer files to emails to provide extra context to work orders. Technicians that desire a hard copy version of a work order have the ability to print them, attachments included.

A big advantage of email systems over others discussed so far is built-in scheduling capability. Organizations use calendar appointments to assign and schedule work orders at a specific date and time. Automatic notifications remind technicians of upcoming appointments.

Email-based work order management is not without its limitations. For one, emails require manual data entry in order to create and update work orders. One person is responsible for generating work orders from scratch, by copying and pasting from previous emails, or through managing templates in the form of email drafts.

Email communication presents additional difficulties. Emails sent to a single person cannot be seen by others; emails sent to groups provide more transparency but can lead to multiple responses for the same job and muddied conversations.

Finally, email software does not provide transparency between users. Technicians do not have access to an asset’s service history unless they have previously performed the work. Even so, workers do not have access to work that others have performed.

Recommended Reading: 10 Reasons to Use CMMS over Email

Spreadsheet Work Order Management System

The next level of functionality is the use of spreadsheet software as a work order management system. Spreadsheets are still used by many maintenance departments today. Microsoft Excel is the most commonly used spreadsheet software, as it is part of the Windows operating system on which most businesses run.

Spreadsheets are a popular way to manage work orders due to their ability to organize information through the use of tabs, columns, and rows. Files contain defined spaces to hold specific information, making it easy for users to know exactly where to find or enter information about maintenance activities. Formatting options like text styles and background colors can draw attention to important information.

Savvy users can use formulas, data validation, and other data management features to provide some level of automation. For example, a field can be set up to automatically calculate labor cost by multiplying labor hours by an employee’s hourly rate. Spreadsheet software also generates basic charts, graphs, and reports.

Despite their advantages, spreadsheets create a shaky foundation for work order history. Spreadsheets require some computer know-how to enter and update data. A non-savvy user could easily mess up columns, rows, and formulas without knowing how to fix it. Data entry in spreadsheets is still very manual and cumbersome.

Another disadvantage of spreadsheets has to do with file access. Some files are locked into a single computer, making it difficult for others to access and see up-to-date maintenance information. Even if files are widely available, only one user can open the file at one time. More worrisome is that users may inadvertently delete or move the file, risking the loss of maintenance data.

Perhaps the biggest drawback of a spreadsheet-based work order management system is the lack of automated work order generation, particularly as it applies to preventive maintenance. Spreadsheet software does not have the ability to automatically generate work order forms based on a schedule. Therefore, work order creation, assignment, scheduling, and distribution remains a very manual process.

In-house Work Order Management System

Organizations that recognize the downfalls of the previous systems mentioned can create their own in-house, “homegrown” work order management systems using database software such as Microsoft Access.

The biggest advantage of a homegrown work order management system is customization. While off-the-shelf work order management software products must be design to appeal to many businesses with many different processes, a homegrown system is tailored to the way you work. Depending on the IT resources available, the potential benefit of homegrown systems is virtually endless.

All that being said, developing a work order management system requires a large time and IT investment. Organizations must be able to: create the database, build the software client, install it on servers, host the data, protect and safeguard the code, understand the organization’s maintenance management needs, upgrade hardware and software to support the system, and continually ensure the integrity of the system. Many small to medium sized-businesses simply do not have the manpower to create a work order management system in house.

Adding to the statements above, many homegrown systems are built without the end user experience in mind. The result is that users often find the system too cumbersome to use and inevitably either abandon it or reluctantly accept that more time and effort needs to be devoted to data entry.

Work Order Management Software

As its name suggests, work order management software is specifically designed for managing maintenance work orders. Because proper work order management relies on information about other maintenance resources, work order management functionality is a central part of computerized maintenance management system (CMMS) software.

CMMS software is the most complete work order management system. The benefits of automated work order software can be felt throughout the entire work order management process.

First, it provides requesters with a channel for requesting maintenance assistance. The system notifies administrators of incoming requests, allowing them to review and approve them. Based on the urgency of requests and other maintenance work, the CMMS makes it easy for administrators to prioritize, assign, and schedule work orders.

The CMMS automatically notifies technicians about assigned maintenance work and distributes it electronically, ensuring that work orders don’t get lost. Technicians are able to use an internet-connected device to update work order details and close out work orders once they are complete. A work order list provides technicians with visibility of “open” work orders.

Finally, a CMMS automatically tracks and stores data collected through work orders so that it is available for analysis. Maintenance reports allow organizations to track work order key performance indicators (KPIs), identify trends in productivity and asset downtime, and adjust maintenance plans accordingly.

One of the primary concerns with work order management software is the cost of software and training. On the plus side, many vendors offer subscription licenses to reduce the upfront costs of getting started. To put things further in perspective, the long-term benefits of CMMS software in terms of cost- and time-saving more than make up for the cost of software. For example, consider how much money is saved by reducing asset downtime, even if only by a few hours per year.

Another potential issue is the need to gain employee buy-in. A CMMS represents a new way of doing things, and it is possible that you may face some resistance to the idea of doing things differently. Our article, How to Increase CMMS User Adoption, provides an overview of user adoption challenges and provides some tips on how to deal with reluctant employees.

Manage Work Orders with FTMaintenance

Choosing the right work order management system is an important decision with many factors to consider. It is clear that a CMMS, like FTMaintenance, is the superior choice when it comes to managing maintenance work orders. However, FTMaintenance is more than a simple work order management system. Our full suite of features provides functionality that makes it easy to track assets, MRO inventory, work requests, preventive maintenance, and more. To learn more about FTMaintenance, request a demo today.

Maintenance storeroom organization greatly influences maintenance operations and the organization’s bottom line. However, maintenance storerooms are commonly disorganized, cluttered, and neglected, creating numerous inefficiencies that drive up MRO inventory costs. Though organizing your maintenance storeroom may be a long process, the benefits of improved asset reliability and productivity are well worth the effort.

Why Maintenance Storeroom Organization Matters

The organization of your maintenance storeroom greatly impacts the productivity of the maintenance team. According to a study conducted by Emerson Reliability Consulting, technicians spend 10% to 25% of their time obtaining parts. Instead of performing maintenance work, maintenance staff is spending up to a quarter of their day trying to identify and locate spare parts! Meanwhile, the organization unnecessarily loses money from lost production, extended asset downtime, and emergency inventory purchases.

An organized maintenance storeroom provides several benefits. First, it allows maintenance staff to get in and out of the storeroom quickly because everything is in its place and is easily found. This shortens the amount of time it takes for technicians to respond to unplanned maintenance events, reducing downtime.

Better part location also reduces the need for workers to create their own “private” inventories in personal toolboxes. As a result, inventory counts become more accurate, reducing duplicate orders for parts that are in stock but cannot be found when needed.

Reduced inventory levels not only mean less inventory spend, but also that less space is needed for storage. Combined with improved storage solutions, more free space is available in the facility for additional production equipment, kitting, or other workspace.

Maintenance storeroom organizations also impacts inventory control. When storeroom clerks are able to plainly see what items are in stock and how much is on hand, they can make better decisions regarding the timing of orders, order frequency, order size, lead time, and available storage space.

Finally, better storeroom organization means that MRO items will be stored properly, protecting them from degradation caused by humidity, temperature, dust, and other environmental factors.

How to Organize Your Maintenance Storeroom

The most tried and true approach to maintenance storeroom organization is 5S, developed as part of lean manufacturing. The philosophy behind 5S is that good results cannot be achieved until a workplace is in a clean and organized state. It is estimated that the effective implementation of 5S improves maintenance efficiency by 10% – 30%. Therefore, this discussion will approach maintenance storeroom organization through the lens of 5S. For those unfamiliar with the concept of 5S, each S is defined below:

• Sort: Examine a set of items and remove those that are unnecessary or unwanted.
• Straighten / Set in Order: Determine a logical way to arrange items.
• Shine: Keep workspaces clean and well-maintained.
• Standardize: Systematize the previous steps and create standard operating procedures that make these activities routine.
• Sustain: Make 5S a part of the company’s culture.

Sort

Over time, storerooms tend to hold MRO items that are obsolete. For example, assets are often replaced or retired, leaving their associated parts behind. Organizations also switch inventory vendors in search of better prices or contract terms, resulting in out-of-date parts. Or possibly, an effort to standardize parts across equipment renders parts useless.

The goal of sort is to get rid of unnecessary items. Ideally, every item left in the storeroom is tied to operating equipment. Also consider stocked items that are not stored in the storeroom, such as spare parts managed through vendor managed inventory (VMI) agreements.

There are many valuable resources that can assist with sorting. MRO inventory management systems, if available, are used to create bills of materials (BOMs), track usage metrics, and analyze other inventory management data for decision making. Technicians and maintenance storeroom staff are also valuable resources. They work directly with the parts themselves, and can offer insight into the purpose of parts, when and how often they are used, and whether the parts are truly needed.

Straighten / Set in Order

After the sort phase, only essential items should remain. Next is to straighten or set items in place. The straighten phase is best summed up by the proverb “A place for everything and everything in its place.” This phase helps organizations locate parts and tools in the most efficient manner.

Parts Organization Methods

There are numerous ways to organize items within the storeroom. Regardless of what method is chosen, parts should be easy to find, easy to use, and easy to put away. Two common ways to organize parts are by asset or by part type and are described below. It should be noted that many organizations use a combination of organization methods.

Organize Parts by Asset

With this method, parts are organized by the asset(s) on which they are used. Organizations choose this method because it makes it easier to find the right parts for an asset, whether for planned or emergency maintenance. It is also useful when many parts are needed for the same asset at once.

A major downside of this approach is duplicity. Parts that are used on more than one piece of equipment, which is often the case, must be stored in multiple locations. Organizing inventory this way requires more precise inventory control and additional storage space.

Organize Parts by Type

This approach organizes similar parts together (i.e., bearings with bearings, fuses with fuses, etc.) and provides numerous advantages. First, it helps with troubleshooting because it makes it easy to find substitute parts if required parts are out of stock. Second, it makes it easier to measure the value of inventory part types – for example, you can see how many motors are in stock at a glance. Finally, grouping inventory parts by type reduces duplication, since parts are only stored in one location.

One potential downside to this method is the opportunity for mistakes. Technicians in a hurry are more prone to grab the wrong part, which delays response times and increases downtime costs. However, a barcoding system reduces this risk. More on this topic is discussed in the Standardization section.

Location

Straighten also means determining the best locations for parts within the maintenance storeroom. For example, commonly used parts may be placed closest to the entrance to reduce unnecessary travel. Alternatively, items commonly used together may be located near one another, like storing personal protective equipment (PPE) near hazardous chemicals.

Storage Solutions

The structures used to hold inventory items should also be considered during this phase. There are many storage solutions available, each with their own pros and cons depending on the type of inventory being held. For some companies, shelves and bins work fine. Storerooms with space limitations may consider high density cabinets.

Also consider storage locations outside of the storeroom, such as lockboxes, cribs, and other areas. These storage locations provide quick access to high volume parts without requiring technicians to travel all the way back to the storeroom, thereby increasing their productivity.

Shine

The shine stage focuses on keeping the storeroom clean and by extension, well maintained. Basic housekeeping improves storeroom safety by removing debris that leads to slips and falls. Cleaning reduces the risk of pathogens and other health hazards.

One must also pay attention to the condition of the storeroom itself. Parts stored in environments that are overly humid, hot, or cold leads to premature part degradation. For example, excess moisture in the air that collects on surfaces causes corrosion and mold. Dusty parts do not perform to specification. When combined with humidity, dust and debris stick to parts and become difficult to remove.

Take note of other storeroom conditions as well. Ensure that storage equipment is in good condition. Fix any holes in the roof, cracked or broken windows, or missing doors. Provide proper lighting and heating and air conditioning. While these tasks sound like common sense, you’d be surprised at how often they are ignored.

Standardize

After sort, straighten, and shine, your maintenance storeroom should be in pretty good shape. The standardize step makes the aforementioned activities routine so that your storeroom doesn’t slowly slip back into a state of disarray. Standardization involves creating standard operating procedures that reinforce 5S principles.

Schedules and Checklists

Create a schedule to make 5S tasks a part of your routine operations. Schedules spell out how frequently tasks like cleaning should be done and who is responsible. Also provide a chart or checklist that communicates what needs to be done. Checklists not only serve as a reminder of what to do, but can also be used to audit whether tasks are completed to satisfaction. Overtime, these tasks will become second nature and will be done automatically.

Naming Conventions

Standardized asset naming conventions help identify parts and their attributes. Technicians can use asset names to quickly locate parts within the storeroom, depending on its organization. For example, if all bearings are stored together, a technician will know which section of the storeroom to look in when a part name that includes “BRNG” appears on a work order.

Further, assign standardized names to the storeroom aisles, racks, shelves, and bins. This information directly tells workers where parts are located, such as aisle 5, rack A, shelf 1, and bin 7.

Standardization also extends to the inventory tracking system or computerized maintenance management system (CMMS). A standardized asset naming convention helps employees easily identify parts in the system, as well as provides a way for new records to be added in the future.

Labeling and Signage

Labels and signs provide employees with a quick reference of 5S expectations. Print and display maps of the storeroom to remind technicians where parts are located so they can be picked or returned. Use labels on aisles, racks, shelves, and bins to direct employees to the exact location of a part. Hang posters that remind workers of the importance of cleaning and so on.

Barcode labels are useful for managing a large number of MRO items. Scanning barcodes is an error-free way of identifying parts and their associated storage locations. Barcoding parts and storage bins ensure that items are easy to find and that everything has a home.

Sustain

Habits take time to form. Organizing the maintenance storeroom – and ensuring it stays organized – takes a department-wide, even company-wide effort. The goal of the sustain step is to form long-lasting habits and continuously improve. Doing so may require a change in maintenance culture. Tools like schedules and checklists, mentioned earlier, help reinforce behaviors that make 5S sustainable. Further, maintenance management should follow up to make sure tasks are being completed.

Safety

Some companies choose to include safety as a sixth “S”. Safety focuses on reducing potential hazards as much as possible. Improving maintenance storeroom safety can take many forms. For example, apply a warning label to cabinets that contain chemicals. Make storage shelves more stable by storing heavier items near the floor and lighter parts higher up. Hang safety-focused signage such as “Watch Your Step” or “Authorized Personnel Only” where applicable.

Maintain an Organized Maintenance Storeroom with FTMaintenance

Properly organized maintenance storerooms lead to many productivity benefits provided that they stay organized. FTMaintenance CMMS software helps organizations manage their maintenance inventory by providing powerful MRO inventory management features. With FTMaintenance, you can track all spare parts (including their stockroom location), ensure storerooms are well maintained, and improve accuracy with barcode scanning. Schedule a demo today to learn more.