Famed 19th-century British mathematician and engineer Lord Kelvin, once said, “if you cannot measure it, you cannot improve it.” While KPIs (Key Performance Indicators) didn’t gain widespread business adoption until the 1990s, their significance in modern Enterprise Asset Management (EAM) cannot be overstated.
KPIs are critical because they provide measurable insights into asset performance, maintenance efficiency, and overall operational health.
Why Are KPIs Important for EAM Organizations?
There is a good reason why KPIs are a staple within EAM organizations. Organizations rely on KPIs to monitor, measure, and optimize their asset management strategies. Here’s why tracking KPIs is crucial:
- Asset optimization: KPIs help organizations track asset reliability, availability, and efficiency, ensuring that equipment operates at peak performance with minimal downtime.
- Reduction in downtime: KPIs enable organizations to proactively address maintenance issues, reducing unplanned downtime and increasing overall productivity.
- Better cost-control: KPIs help organizations manage maintenance budgets and reduce unnecessary expenditures
- Enhanced decision-making: With the insights afforded by KPIs leaders can make informed strategic decisions.
- Optimized inventory and resource management: KPIs can help ensure organizations maintain the right balance of spare parts, reducing overstock and preventing delays caused by parts shortages.
Six Key KPIs to Monitor
Here we further explore six essential KPIs that every EAM organization should monitor to achieve peak performance.
#1. Asset Availability
Definition: Measures the percentage of time equipment is operational and ready for use.
- Why it’s Important: High asset availability ensures business continuity, productivity, and profitability.
- Improvement Strategies: Implement automated work order scheduling, prioritize critical assets, and optimize resource allocation.
#2. Mean Time to Repair (MTTR)
Definition: Measures the average time required to repair an asset after failure.
- Why it’s Important: A lower MTTR reduces downtime and boosts productivity.
- Improvement Strategies: Utilize digital work orders, enable real-time tracking, and automate technician assignments to accelerate repairs.
#3. Mean Time Between Failures (MTBF)
Definition: Tracks the average time between equipment failures, helping organizations assess asset reliability.
- Why it’s Important: A higher MTBF signals improved asset reliability and reduced maintenance costs.
- Improvement Strategies: Implement predictive maintenance, use historical data to optimize service intervals, and conduct regular inspections.
#4. Inventory Turnover Ratio (ITR)
Definition: Measures how frequently spare parts inventory is used and replenished.
- Why it’s Important: A well-managed inventory ensures critical parts are available when needed without overstocking.
- Improvement Strategies: Use predictive analytics to forecast spare parts demand, optimize reorder points, and prevent unnecessary stockpiling.
#5. Work Order Completion Rate
Definition: The percentage of completed work orders compared to scheduled work.
- Why it’s Important: A high completion rate indicates maintenance tasks are executed efficiently and on time.
- Improvement Strategies: Automate notifications, track job progress in real-time, and integrate mobile work order management tools.
#6. Overall Equipment Effectiveness (OEE)
Definition: A comprehensive metric evaluating asset performance based on availability, efficiency, and quality.
- Why it’s Important: A higher OEE reflects improved operational efficiency and reduced unplanned downtime.
- Improvement Strategies: Align maintenance schedules with production cycles, minimize disruptions, and use real-time performance monitoring.
Gaining a KPI Competitive Advantage
Tracking the right KPIs in EAM is crucial for SAP-driven organizations to improve asset reliability, optimize maintenance strategies, and enhance overall operational performance. By leveraging analytics and automation, businesses can turn data into actionable insights that drive long-term success.
The Envoy Suite of Products was designed to help EAM organizations optimize these key KPIs. From Envoy Balance, our planning and scheduling tool that improves efficiency and resource allocation, to Envoy Maestro, which simplifies logistics management, our solutions are empowering some of North America’s leading organizations to achieve measurable improvements.
Let’s schedule a time to discuss how our solutions can help you optimize these KPIs and drive measurable improvements.
