Why MRO excellence means building a digital thread
Despite breakthrough advances in digital technologies, many MRO businesses are still waiting to see these gains reflected in their bottom line. The challenge, of course, is not with the technology itself. Rather, it stems from a lack of digital continuity between systems, assets, and products – a digital thread.
This is especially the case with asset-intensive industries such as aviation, rail, mining, telecoms, oil and gas, and infrastructure. Maintenance of complex assets in these industries involves material planning, long-term maintenance and upgrade plans, parts procurement, component removal and safe disposal, cost and time estimation, predictive maintenance notifications, etc. And as businesses become ever more reliant on increasingly-complex, multi-million-dollar assets, ineffective maintenance processes can bring down other critical, value-generating business processes for hours, days, or even months. Add in rising levels of competitiveness, and it has become clear that MRO excellence is now essential for survival.
MRO excellence calls for carefully calibrated process models delivered to users with the support of the right technologies. The answer is to bridge the disparity between digital systems, and various facets of assets like procurement, logs, maintenance schedules, inventories, etc. - by building continuity through a digital thread.
This blog will explore how asset-intensive industries can leverage a digital thread in MRO to deliver significant gains to the bottom line.
The MRO challenge in asset-intensive industries
Today, asset-intensive industries stand divided in decommissioning old assets to acquire new ones and attaining and managing equipment through their life cycles. The difference between the profitability of leaders and laggards here is stark, especially when one considers that maintenance operations typically account for 20-60% of the OPEX spend across industries.
It’s worth reflecting on some of the key, common challenges that asset-intensive businesses encounter across their MRO functions – as they can all be addressed by the digital thread:
- Rising asset complexity: Legacy components are characterized by low complexity and can be repaired and maintained more easily. However, new-age process models leverage assets built on advanced technologies using more complex parts – which require superior domain expertise for maintenance and repair.
- Varying lead times for components: Part replacement needs to be orchestrated quickly, as they are likely to be involved in critical business processes. However, due to differing lead times and availability uncertainty, service blackouts can significantly increase the negative impact on the bottom line of the business.
- Lack of visibility: When asset management functions leverage inefficient models to keep track of maintenance schedules, and lack critical information like time to repair or optimal maintenance orchestration windows, maintenance becomes a cost black hole with uncertain downtimes.
- Inefficient toolsets: Legacy MRO processes leverage a fragmented toolset, including Excel sheets, multiple applications, data models and datasets to manage various aspects of the asset life-cycle - like procurement, billing, commissioning, inventory management, logistics, and repair execution, and so on.
- Data-insights disconnect: Despite the falling costs of IoT and AI, leveraging these technologies to build insights into the maintenance needs of assets has not been an easy undertaking. Moreover, actionable insights deliver productivity and cost gains in maintenance and repair operations.
- Lack of standardization: For global organizations, a lack of standardization in maintenance and upgrade management, procurement toolsets, pricing strategies, and price estimation models can contribute to sub-optimal profits .
The solution to both these common challenges – as well as those unique to industries – starts with leveraging digital platforms to unify the various aspects of the asset life cycle. Doing so will also allow your business to augment multifaceted functions with traceability, digital process support, and provide a simplified experience to end-users.
The maintenance digital thread: An enterprise’s single source of truth
It is against the backdrop of these challenges within asset maintenance that the idea of the digital thread was born. The digital thread is built using product data and asset attributes that add value to the business. These asset attributes are given an identity that is retained until decommissioning and beyond.
The maintenance digital thread uses the right data models and digital application systems to lend digital continuity to every asset that enters and exits the value chain. In other words, the maintenance digital thread is a singular source of truth for the enterprise. It lays the right foundation for a paperless but also digitally integrated (rather than digitally fragmented) MRO unit.
Importantly, it makes it possible to obtain a bird's eye view of the entire asset landscape and bring traceability to MRO at a granular level.
Building traceability at a component level
So, how is the product traced through the scope of operations? A few key technologies enable enterprises to build traceability at a component level with precision. For instance, each asset or its parts are traced with the help of their serial numbers. In addition, IoT sensors enable tracking of its location and other essential data such as vibration patterns, heat/temperature levels, etc. Data from sensors help enterprises proactively keep their assets running in an optimal state, reducing downtime for the customers while minimizing repair costs.
It is important to note that the digital thread is not built by simply bringing product-level data together. Instead, it leverages this data and augments it with the context to deliver actionable insights to the right people at the right time by providing visibility into real-time events and part-level traceability.
In other words, the digital thread improves communication and collaboration between cross-functional and cross-border teams, enabling them to make better decisions across the asset life cycle.
Why the digital thread has become central to survival
But how does the digital thread augment internal and external MRO models for asset-intensive businesses?
The maintenance digital thread defines a maintenance strategy of an asset class. It includes short and long-term maintenance plans, identification of assets, commitment to service levels, routine check schedules, contingent and complex event plans, and so on. Once a strategy has been identified, digital guardrails ensure that an asset entering the ecosystem is subject to a well-defined maintenance strategy, maximizing certainty and laying the foundations of scalability without encountering unexpected complexity.
To execute strategies over time, maintenance planning tools are leveraged to enable teams to acquire resources in time, schedule specialists' hours for tasks, prioritize backlogs efficiently, and carry out preventive maintenance during the most optimal windows. Moreover, IoT data is aggregated within the environment to deliver insights and prevent unexpected failures.
Lastly, maintenance and repair remove repairable parts (often called rotables). The digital thread enables enterprises to feed critical parts back into inventory. In many industries, rotables play an essential role in building profit margins and upgrade / modification strategies need to be aligned dynamically, making it difficult to track expenses and revenues holistically, and more importantly, identify the cost and time involved with each step of the asset life cycle.
Traceability, efficiency – and bottom line improvements
All of these aspects of asset maintenance are a part of the digital thread. The digital thread enables MRO enterprises to build accurate cost estimates and invoices for large-scale maintenance orders while also tweaking maintenance strategies over time as new insights emerge from the data logged within the system. A maintenance strategy will also encompass quality assurance and defect inspections. These events are integrated into the digital thread, where notifications appear when a need to execute defect repair arises.
This all points to why the digital thread has become central to survival. Quite simply, leveraging disparate enterprise asset management systems, ERP applications, and procure-to-pay applications leads to a loss of oversight into the central proposition of MRO excellence. Efficient and transparent approaches to asset management enabled by the digital thread, however, provide asset traceability across multiple stages of the asset life cycle. This results in more efficiency and simplicity than relying on fragmented resource, engineering, and financial management tools.
Business benefits of the digital thread for MRO
Our position is that businesses need to rethink maintenance as an avenue for value delivery rather than as a cost center. So what are the business benefits of leveraging the digital thread for MRO? Here are a few key advantages:
- The digital thread enables enterprises to accurately predict the time frames at which maintenance and routine inspections need to be carried out - within a span of six months to thirty years or more.
- With complete visibility into maintenance schedules and well-defined complex event plans, procurement teams clearly understand the pipeline based on accurate material plans for routine and non-routine requirements.
- Some digital thread implementations also empower planners with a GUI workbench, which provides intuitive insight into maintenance requirements, enabling them to visualize upcoming schedules with different filters and views.
- Extended forecasts, visibility into the assets landscape, and traceability of materials and components enable the delivery of services with near-zero downtimes at lower costs, resulting in a better experience and improvements to the bottom line in the case of internal MRO units.
- Digital thread implementation results in better first-time repair rates and improves the value delivered by an asset to the business across its life cycle. Lastly, with rotable repairs and safe decommissioning, enterprises can also advance their sustainability imperatives.
In the spotlight: The digital thread in the aviation industry
It’s worth doing a deep dive to see the digital thread in action.
A European aviation MRO company partnered with HCLTech to leverage the digital thread to improve its customer satisfaction levels and profitability, and ease its IT complexity. With the digital thread, the aviation MRO business can now standardize global material ordering, quote-plan-execute processes, implement data standards, and build a collaborative, resilient, cloud-based environment. This has led to cost and productivity gains and better compliance adherence.
Such success stories are prompting asset-intensive organizations to build a customizable digital thread that responds to their unique needs when it comes to asset maintenance and repair operations.
The digital thread enables an asset-intensive business to move beyond a fragmented approach and create value by leveraging a seamless and integrated asset management and maintenance strategy. Each move, resource, and signal are captured to maximize the yield of an asset using the digital thread.
Although the digital thread brings operational simplicity and improves efficiencies and costs, implementing it can be a challenging and daunting initiative. With close collaborations between technology leaders and the enterprise, businesses can translate their experience into a well-calibrated digital platform that augments MRO processes with precision and delivers a superior experience to users - and successfully transform their MRO units to achieve a marked edge in their lines of business.