Natural Resources & Chemicals the way we see it

Asset Performance Management

Maturity Model
Strategic Roadmap to Digital Manufacturing
Contents
Abstract 3

1 Introduction 4

1.1 Overview of Asset Performance Management (APM) 4

1.2 Why ‘Now’ is a good time to relook at your APM Strategy 5

2 APM Maturity Model 6

2.1 Overview of Maturity Model 6

2.2 APM Dimensions 8
2.3 Maturity Assessment Approach 9

3 Business Benefits of APM 10

Conclusion 11

About the Authors 11

References 11

This message contains information that may be privilaged or confidential and is the property of the
Capgemini Group. Copyright ©2017 Capgemini. All rights reserved.
 Natural Resources & Chemicals the way we see it

Abstract
Asset-intensive industries operate in an environment of volatility The key questions that puzzle asset-intensive organizations are
and are under tremendous pressure to improve operations “How does one determine if the assets are operating effectively?”
and keep a check on costs. Digital Manufacturing or Industry and “How can these be improved?” One of the elements of
4.0, enabled by low cost sensors and smart manufacturing Digital Manufacturing that can answer these questions is
operations, is changing the way the industry is operating. With Asset Performance Management (APM). Organizations need
machines communicating and exchanging information in real to periodically assess their assets and determine if they are
time, industrial production processes are becoming more and operating at the ideal level. With ever-changing customer needs,
more efficient. The technologies behind digital manufacturing regulatory environments, and advancements in technology, this
could help manufacturers keep up with the changing demands is a perfect time to assess your position and potential.
of the market and stay relevant. But with so many possibilities
and technologies around digital manufacturing, how does one This whitepaper highlights the asset performance maturity
get to know the right technology that will help them solve their model as well as the various principles of asset management
complex problems? that may be evaluated.

3
1 Introduction
1.1 Overview of Asset Performance
The business environment for natural resources and
Management (APM)
manufacturing companies has seen a steady improvement over
the past few years, but these firms need to continue their focus
on adding shareholder value. The primary objective of Asset Performance Management
(APM) is to help organizations increase their asset efficiency,
The Digital Manufacturing or Industry 4.0 movement presents a manage assets sustainability, improve customer centricity,
significant opportunity to improve manufacturing outcomes and and optimize the total cost of ownership. Improving asset
efficiencies. Advances in information technology and sensors, performance helps organizations not only reduce costs,
paired with the availability of copious industrial data, efficient but also keep production plans on track while catering to
connectivity, and advanced computational ability is proving to end demands. According to a McKinsey research report,
be a game changer for improving maintenance strategies and improved asset efficiency will contribute to an incremental
manufacturing outcomes. The factory of the future (and the value of more than $250 billion in the U.S. by 2025.
future is now!) will have end-to-end digitization of information
flows, digitization of physical assets, and integration of value To improve asset performance, Capgemini recommends
chain partners leading to hyper efficiency, yield improvement, an Asset Performance Management Maturity Model
and customer centricity. approach. The Asset Performance Management Maturity
Model approach involves continuous benchmarking that
But has the din and hype around digital manufacturing left you helps organizations determine their present state, compare
with too many good ideas and no point of departure? In this it with industry peers, recognize improvement areas, and
series of whitepapers, Capgemini identifies and guides clients identify opportunities and risks associated with their
to move beyond the hype. One of the key elements of digital assets. The APM Maturity model will enable organizations
manufacturing focuses on asset performance management to design the roadmap to improved APM Strategy.
(APM). For asset intensive companies in particular, and
manufacturing industries in general, it is critical to include
asset performance management as a key component of digital
manufacturing strategy.

4 Asset Performance Management Maturity Model

 Natural Resources & Chemicals the way we see it

1.2 Why ‘Now’ is a good time to

relook at your APM Strategy

One of the reasons for the underinvestment in technology There is no instant solution to address these problems. Investing
was the lack of clarity on the benefits accrued or the return in places that do not produce enough gains will only deepen
on investment. Yet with the right technologies in place, the problem. APM follows a maturity curve, and it is essential
manufacturers can focus on core areas while accommodating to identify the current level of maturity. Once identified, then
frequent regulatory environment changes and changing the next steps—in the areas of process, technology, and
customer needs. governance—can be laid out. By taking this step-by-step
approach, companies can understand what technology and
Asset intensive companies face challenges in getting the best process improvements will yield the required benefits.
out of their assets. Prolonged overlooking of unscheduled
maintenance, equipment breakdowns, lack of visibility into The right APM strategy will clearly make an impact on
operations, and heavy spare part inventory levels, will eventually company’s profitability. The financial areas affected by APM are
lead to an unhealthy balance sheet and a company losing out to as follows:
its competitors.

P&L Impact Area Balance Sheet

Impact area

Maintenance Production Production Asset

Quality
Cost Cost Capacity Lifespan

Impact
On Operational COGS Revenue Operating Cost Inventory
Financial Expenses & Revenue Capital Expenditure
Metrics

2% to 5% Increase
Close to 1% in revenue
8% to 15% 3% to 5% 2% to 5%
Outcomes Reduction through
Reduction in Improvement Improvement in
in overall Production
Maintenance cost in Quality Asset Lifespan
Production cost Capacity
Improvement

Figure 1 Affect of APM on Financial Areas

5
2 APM Maturity Model
An asset performance management maturity model is a maturity curve is broken into five stages with each stage having
systematic approach to analyzing an organization’s asset a set of unique capabilities. The first stage of the maturity
management processes, technologies, capabilities, and curve represents manual or unmanaged processes for asset
systems. Improving the maturity level will help an organization management, while the last (fifth) stage represents an ideal
achieve ideal levels of APM outcomes. operating level of industrial assets.

Overall equipment effectiveness (OEE) measures the

2.1 Overview of Maturity Model productivity of assets, and efficiency measures total cost of
operations. For companies to thrive in the competitive market,
The APM maturity model can help organizations understand it is important that both asset effectiveness and efficiency
their present capabilities and skills, and identify a sequence operate at the best levels. The maturity model approach helps to
of steps required to progress to the next level. The APM maximize the effectiveness and efficiency of assets.

6 Asset Performance Management Maturity Model

 Natural Resources & Chemicals the way we see it

The following diagram represents the broad indicators defined

by Capgemini at each level of the maturity model:
(Op. cost)

(Op. cost)

(Op. cost)

(Op. cost)
Efficient

Efficient

Efficient

Efficient
Incremental
Value

Effective (OEE) Effective (OEE) Effective (OEE) Effective (OEE)

Lifecycle
Impact

Execution
Excellence

Evolving/ • Asset History at

Integrated
Enterprise Floor

• IIOT / Connected
Compliant / • Asset Data Assets
Normative
collection
& Reporting • Pro-Active
Maintenance
• Condition
• Asset Visibility • Systematic
based/Predictive
Maintenance Framework for CI
• Periodic
Maintenance Plan • OEE Drill-down &
• Error Proofing
Live Data
Defined / • Process
Preliminary • OEE Monitoring
Excellence-Asset • AR (Augmented
Adoption
Category, Reality) in Training
• Plant Simulation
Comparison & Service
• Integrated Supply
• SOPs, Checklist, • Asset Strategy / • Focus on reliability
Chain
Ad-Hoc/ Manuals Roadmap
Initial • Asset Life cycle
• Decision Support
• Automation • OEE Measurement focus and Impact
• Energy
• Reactive • Enterprise Aligned • Inbuilt Intelligence
Management
Maintenance Metrics

Level 0 Level 1 Level 2 Level 3 Level 4

Maintenance - Cost Focus Maintenance - Investment Focus

Plan Acquire Deploy Manage Dispose

Figure 2 APM Maturity Model

7
2.2 APM Dimensions
Capgemini has defined six APM dimensions along with the
capabilities required at each maturity level. An organization’s
asset management maturity level is evaluated on these six
dimensions

–– Asset Information Management: performance metrics (SMRP KPI’s) will help identify areas
of improvement. The type of metrics and frequency of
For an organization to have an effective asset performance measurement determines the maturity level.
management, they need to have accurate information
regarding the assets on the plant floor. Lack of availability –– Governance and Standards:
and access to the information about the assets at the plant
floor will impair the organization’s ability to make the right Governance in asset management deals with clear policies
decisions. The Asset Information Management dimension and guidelines to manage assets throughout their lifecycle
will indicate how effectively the organization manages its from commissioning to retirement. With stricter regulations,
asset information. The information being assessed will also an organization requires stringent governance structures.
include asset strategy, financials, and information systems. Governance does not deal with asset management per
se, but it deals with the principles upon which asset
The asset information can be used to predict and prevent management is executed. The maturity model approach
asset failures. The maturity model approach will help will help determine whether or not proper governance
understand the organization’s capability to capture asset mechanisms are in place for asset management.
data, monitor asset information, and predict and mitigate
failure proactively. –– People and Culture Management:

–– Process Management: Asset performance is highly dependent on the skills of

those working with assets and established processes.
It is necessary for organizations to develop and maintain There is a strong need to manage the training, the
standard management processes and guidelines to development, and the work force in an asset-based
support their asset management systems. organization. Not focusing on these elements can
create a barrier for implementing any asset performance
In asset intensive industries, it becomes extremely difficult management initiative.
to track asset warranties. Every asset may have different
warranty contracts that expire at different times and –– Tools and Technologies:
have different methods of renewal. Tracking claims can
consume significant time and effort. Failure to correctly Leveraging the right set of tools and technologies for
track and process claims could result in huge losses due asset management can significantly transform and
to warranty expiration and incorrect claims. The extent optimize asset operations. However, organizations
to which these management processes and guidelines operating in silos will fail to extract the full benefits. The
are enabled through systems and SOPs with continuous extent to which appropriate tools and technology are
monitoring and improvement determines the maturity level. used in the organization will determine the maturity
level. An organization at level 4 of the maturity curve will
–– Reliability and Performance: utilize technologies like augmented reality/virtual reality
for training, big data for asset information management,
Reliability is the ability of assets to operate for a specific drones for monitoring, and 3D printing for spare parts
time period without failure. Downtime of assets can replenishment.
seriously affect profitability. Incorporating maintenance
plans with production plans can mitigate the breakdown
of assets. Continuous measurement and monitoring of

8 Asset Performance Management Maturity Model

 Natural Resources & Chemicals the way we see it

Assessment
Level 0 Level 1 Level 2 Level 3 Level 4
Dimension

Asset Information Asset Hierarchy Connected assets

Capture of Asset Data Analyzed to managed with for capturing and
Management Not Managed operations data predict asset failure specialized tools monitoring data
& Analytics

Continuous
No Defined Standard Customized processes Comprehensive
performance
Process processes are defined & framework with clearly
Processes and guidelines centralized system for defined roles and monitoring
Management & Guidelines of documented
defined warranty management responsibilities
processes

Lack of Automation
and no specific Maintenance manual, Metrics captured Virtual plant Advanced plant
Reliability & SOP for and monitored simulations used simulations are used for
initiatives
Performance for maintenance operations maintained against targets for plant optimization optimizing schedule

Enterprise level
No defined Standard guidelines Governance plan Guidelines with
Governance & governance defined by OEM/Asset Guidelines for continuously
each Asset type Best Practices
Standards standards Vendors reviewed and updated maintained and
enforced

Periodic measurement Dedicated training

People & Culture No Skill Development Comprehensive of competency plan labs with Augmented
programs Need based Training training plan and defined reality, virtual
Management
development plans simulation

Enterprise wide
Tools & Systems operate Seamless data and integration to enable
No IT systems in Silos Integrated IT systems process integrations geographically spread
Technologies
units to work together

Figure 3 Dimesions on which Asset Maturity Level is assessed

2.3 Maturity Assessment Approach

The maturity assessment approach begins with benchmarking interfaces between various systems, data, and product-vendor
the organization’s asset performance. Benchmarking involves relationships. Once all of this information is mapped, it is
the identification and collection of relevant KPI’s. The maturity compared with industry best practices and assessed if they are
assessment process involves understanding the as-is process at the optimum level. The outcome of the maturity assessment
and the current technology landscape of the organization. helps in charting out the future roadmap that includes the
The current technology landscape includes the architecture, technology and means to improve asset performance.

Process Technology
Benchmarking Recommendation
Assessment Assessment

Figure 4: Maturity Assessment Approach

9
3 Business Benefits of APM
APM enables optimal deployment of assets to maximize
profitability and predictability. Some of the tangible business
benefits of APM are demonstarated below, both operational
and financial:

Operational Impact Financial Impact

Eliminates Reduce Reduce maintenance Reduce Capital

Reduce scheduled
breakdowns up to downtime by up to costs by up to Investment by
repairs by up to

Increase overall Overall Production Increase in Increase in Average Increase in Average

Productivity by Growth up to OEE by up to Gross Margin by Operating Margin by

4 Conclusion
Companies are facing increased pressure to reduce Manufacturing and relevant technologies have made it possible
manufacturing costs and maximize return on assets. Making for companies to simplify their maintenance programs and keep
assets more productive remains the key objective of asset operating assets at the ideal level. The first step for an asset
intensive organizations. To achieve this objective, organizations intensive organization in the digital manufacturing journey is to
need to ensure that maintenance programs happen at the right identify its APM maturity level.
time without affecting the productivity of the assets. Digital

10 Asset Performance Management Maturity Model

 Natural Resources & Chemicals the way we see it

About the Authors

Mike Dennis Chiranth Ramaswamy M Noorul Ameen Vijay Jayaram

Mike Dennis has over 25 Chiranth leads the Natural Noorul has over 20 years Vijay Jayaram is an APICS
years of manufacturing, Resources and Chemicals of industry experience in Basics of Supply Chain
supply chain and solutions and consulting IT solutions for Engineering Management (BSCM)
maintenance experience in team at Capgemini. His and Manufacturing firms. He certified professional
both industry and consulting. focus is on helping clients specializes in PLM, EAM with over seven years of
He is a leader and SME in pivot to digital and his and Industrial IOT and he is IT industry experience as
North America for Natural expertise lies in EAM, supply part of Capgemini’s Natural consultant in Supply Chain
Resources, Chemicals chain and manufacturing resources and Chemicals Management, Business
and Services. on the business side business unit. Process Management,
and industrial IoT on the Process Benchmarking and
technology front. Solution Development. He
is a part of Capgemini’s
Natural Resources Solutions
and Consulting team.

References
BCG Perspective – Time to Accelerate in the Race towards Digital Manufacturing
https://www.bcgperspectives.com/content/articles/lean-manufacturing-operations-time-accelerate-race-toward-industry-4/
Capgemini Digital Transformation Institute, Smart factory survey, February-March 2017

11
 Natural Resources & Chemicals the way we see it

For more details contact:

Mike Dennis
Principal, NRCS Solutions
Email: [email protected]
Chiranth Ramaswamy
Director, NRCS Solutions
Email: [email protected]

About Capgemini
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reported 2016 global revenues of EUR 12.5 billion (about $13.8 billion
USD at 2016 average rate). 

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This message contains information that may be privilaged or confidential and is the property of the
Capgemini Group. Copyright ©2017 Capgemini. All rights reserved.