Establish a dynamic equipment and asset management system throughout the life cycle
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I. Establishment of the equipment asset tree and design of the basic information structure. The main difference between a computer system for equipment management and other application software systems in industrial enterprises lies in the wide range of management subjects, the complexity of management tasks, the variety of data types, and the strong emphasis on reliability. Therefore, the success or failure of the system depends primarily on the accuracy of the understanding of equipment management operations, rather than merely on the computer-based understanding of data relationships. It can be said that, on the one hand, due to the high level of professionalism required in equipment management, ordinary software developers are unable to fully understand the characteristics of this field; on the other hand, equipment management professionals, constrained by their computer development skills, also find it difficult to design effective equipment management software. This is precisely why most of the equipment management software available today fails to gain recognition within the industry. Establishing a standard information structure for the equipment management system and designing an appropriate equipment asset tree are two crucial issues that any mature and practical EAM product must address. 1. Establish a standard information structure: Among the numerous data pieces related to equipment management, it is possible to apply classification by category. Every class that is different from other classes represents either a certain aspect of management activities or a goal related to the informational value that should be pursued. From the perspective of computer information, the data information in a device management system can be classified into categories from four viewpoints: (1) Management hierarchy classification: This refers to the levels of management procedures in device management, and it can generally be divided into three levels – management and control level, execution and scheduling level, and job and transaction processing level. (2) Classification of equipment management information: Based on the objects of operation, it can be divided into investment planning information (corresponding to preliminary management), equipment asset and change information (corresponding to asset registers and file management), technical and operational status information, maintenance and repair information, spare parts information, and personnel management information, among others. Based on the nature of the information, it can be divided into planning information, operation implementation information, and statistical information, etc ； Based on the use of funds, it can be further divided into fund planning information, operational cost information, and benefit evaluation information, etc. (3) Classification of equipment management elements: includes department setup, equipment classification, primary and secondary equipment, purpose classification, variation forms, management type, financial classification, etc. (4) Classification of equipment management tasks: These are primarily categorized based on the types of tasks involved in equipment management, and include 12 main categories of tasks such as procurement, asset accounting, asset changes, operation records, inspection and testing activities, handling of failures and accidents, maintenance tasks, lubrication tasks, repair work, procurement of spare parts, inventory management, and disposal of equipment. Only by structuring and organizing these pieces of information from various perspectives in a unified manner can a standard information structure for EAM be established, which serves as the foundation for processing data and information in EAM. 2. Design of the equipment asset tree: A reasonable design of the equipment asset tree forms the basis for the unified organization of information according to EAM standards. There are generally two types of design methods. The first is a device asset tree with a fixed structure; once the nodes of this tree are defined, users are not allowed to make any additions to it ； The second type is a device asset tree with an open structure, which allows users to create multi-node device trees as needed for management. Each node represents a level of management, and the more nodes there are, the higher the level of integration of the data information. The common equipment assets are shown in Figure 1 as a tree structure. In EAM, using individual devices as the objects of management and using device components as such objects are two completely different management approaches, and the results that can be achieved through software are also entirely different. By designing and managing things in terms of specific locations, it is possible to carry out unified quantitative management of data related to equipment inspections, failures, maintenance, lubrication, technical analysis, repairs, and spare parts, thereby providing quantitative decision-making support for management tasks ； This is something that is difficult to achieve with management focused on individual devices. Therefore, the design of the equipment asset tree and its various design methods actually provide enterprises with different management and work organization platforms. Whether it is possible to manage equipment dynamically throughout its entire life cycle with the support of computer technology depends on whether the software enables the organization and processing of data information by device components. II. Design of the equipment life-cycle management model: To manage equipment assets throughout their entire life cycle, it is necessary to be guided by the life-cycle theory. The key to achieving life-cycle management is to establish a computerized life-cycle management model. Due to the large volume of work involved in collecting periodic costs for equipment assets, the high requirements for accuracy, and the need for a scientifically sound data base on which the analysis is based, the life-cycle cost management system we provide is merely a simple model that is in line with the principles of life-cycle management, as shown in Figure 2. This simple and practical model allows for the omission of the collection and analysis of those costs related to the equipment’s life cycle that have equivalent costs but no equivalent value; instead, it focuses on the collection and analysis of costs that are closely associated with the equipment’s use, maintenance, repair, and changes in its value. This approach serves as a basis for management and analysis, enabling business managers to evaluate the cost and value performance of equipment assets through sorting methods, thereby providing decision-making support for equipment repair, renovation, and upgrading. III. Computer-based methods for life-cycle cost analysis One of the key tasks in the life-cycle management of equipment assets is the collection and calculation of life-cycle costs. This has always been an obstacle to implementing lifecycle management for equipment under manual management ； It is a challenge even for computers. Next, we will introduce the computer-based analysis methods for the economic life of equipment, the equipment operation value analysis method based on life-cycle costs, and the decision analysis methods for equipment maintenance, renovation, and upgrading using these two sets of calculation results. 1. Methods for calculating and analyzing the economic life of equipment. Where: T: The economic life of the equipment, that is, its optimal period of use ； P: Original value of the equipment ； L: The residual value of the equipment at the end of the year, L = Net residual value – Demolition costs ； M: The annual average increase in maintenance costs, assuming. The maintenance cost for the first year is calculated as half of the annual average maintenance cost. To calculate the economic life of a computing device, the P value is fixed and the L value is known; the key factor is the M value. There are two specific algorithms for this: (1) Assume that the device has not been put into actual use, and thus no maintenance costs have been incurred for it. In such cases, we use the maintenance costs incurred by similar devices in the company as a basis for calculation. If calculated based on similar equipment, there are D units of such equipment in total. The total maintenance cost over a known service life of T’, which includes costs for operation, maintenance, and repair, is N’. Therefore, the annual average maintenance cost per unit is N = N’/T’D. In this case, M = 2N/T' ； (2) Calculate the maintenance cost of this equipment over a known service life of T’, including costs for operation, maintenance, and repair. Assuming that the total maintenance cost for this equipment is N’, then its annual average maintenance cost is: N = N’/T’. At this point, M = 2N/T' ； The analysis of the economic life of equipment is carried out primarily for Class A equipment; once the economic life of the equipment is determined, it should be compared with its physical life. 2. Analysis of the operational value of equipment assets: V = F/C. V represents the operational value of equipment assets, indicating their useful value ； F: The value generated by the equipment assets, expressed in terms of output volume or the economic value of that output ； C: Operating cost of equipment assets, expressed in terms of life-cycle cost. The life-cycle cost of the equipment is C = C1 + C2 + C3 ； Among them: Cost C1 for ownership includes the cost of purchasing equipment assets (including various taxes), the cost of installing the equipment assets, and the cost of upgrading or renovating them ； Operating cost C2: costs related to energy and medium consumption by equipment, inspection fees for special equipment, asset insurance costs, comprehensive management expenses, etc ； Maintenance cost C3: equipment repair costs, equipment lubrication costs, equipment maintenance costs, expenses for spare parts and materials, as well as costs related to inspections, checks, tests, analyses, and handling of faults and abnormalities. Some of the aforementioned lifecycle costs can be directly read from the software system, while those that cannot be read directly and are not available within the software system can be entered manually via the keyboard. The analysis results of the operational value of equipment assets are meaningful only in two situations: one is comparison among devices of the same type, and the other is comparison of the same device across different time periods. 3. Utilize life-cycle cost analysis to support decisions regarding equipment maintenance, renovation, and replacement. (1) When the cost of maintaining a piece of equipment is greater than its current net asset value, that maintenance plan should be re-evaluated ； (2) When the equipment’s service life exceeds its economic life cycle, and the increase in maintenance costs does not result in a corresponding increase in the operational value of the equipment (the potential increase in output or the economic value of that output due to maintenance is entered via keyboard), this maintenance plan should be re-evaluated, with consideration given to the possibility of implementing technical upgrades ； (3) If, following the technical renovation of the equipment, the increased life-cycle costs of the equipment result in a decrease in its operational value, then the plan for technical renovation of that equipment should be re-evaluated ； (4) In the event of the third situation mentioned above, the equipment should be included in the renewal plan.
I. The necessity of introducing an EAM management system: By utilizing a device management software platform, device management tasks can be standardized. This platform automatically records, stores, retrieves, and processes various types of data related to daily management (such as initial device management, asset management, usage management, maintenance management, lubrication management, repair management, spare parts management, renewal and upgrading management, as well as data related to device documentation, operational data, inspection and maintenance records, information linking spare parts to devices, and inspection data for special equipment). It keeps track of the entire lifecycle of devices, provides timely updates on their operational and maintenance status, and offers informational support for production and other activities. The entire process of equipment management is the daily management of equipment. It begins with the planning of the equipment, and involves the comprehensive management of the entire process—from research and design, manufacturing, inspection, procurement, installation, operation, maintenance, modification, upgrading, to eventual disposal. It is a technical management task that encompasses technical, economic, and operational aspects. II. Purpose of the EAM management system: The main objective of equipment management is to use technologically advanced and economically viable equipment, along with effective measures, to ensure that the equipment operates efficiently, for a long period of time, safely, and cost-effectively, thereby enabling the company to achieve the best possible economic results. By strengthening equipment management, and by continuously introducing technological innovations and upgrades to old and outdated equipment, proper equipment renewal can be carried out to accelerate industrial modernization. III. The Significance of the EAM Management System Equipment management is the material foundation that ensures a company’s ability to produce and reproduce, and it is also the basis for modern production. It is of great significance for ensuring that enterprises increase production, maintain product quality, develop new products, update their offerings, and reduce costs. IV. Content of the EAM management system: The equipment management system is designed to bring order and standardization to the equipment used in a company’s production processes, thereby addressing the issues associated with equipment management. By calculating the failure rate of statistical equipment, it is possible to manage the equipment throughout its entire life cycle (including both static and dynamic information related to each piece of equipment). This approach helps to establish standards for the maintenance and operation of system equipment (such as inspection standards, repair standards, maintenance standards, condition monitoring standards, fault code databases, lubrication guidelines, operating procedures, maintenance protocols, safety regulations, and regular inspection standards). It also improves the utilization rate of equipment, enables a thorough understanding of the actual conditions of the equipment, clarifies the inventory levels of spare parts, and establishes a proper relationship between equipment and spare parts. Rational inventory management of spare parts is possible, and with the help of auxiliary tools, systematic equipment management can be implemented along with effective supervision of compliance with these standards. This ensures that responsibilities are clearly defined, and repair plans are well-structured, thereby avoiding situations such as a shortage of spare parts, insufficient staff, or unprepared technical solutions during repairs. Adopt a diversified maintenance approach to extend the equipment’s service life cycle. An expert database for equipment management that collects basic data and provides various analysis reports, such as analysis of the total life-cycle cost of equipment, economic life analysis, maintenance decision analysis, procurement process analysis, failure cause analysis, failure rate analysis, etc., as well as analyses of various KPIs. To ensure the long-term, efficient, and safe operation of production equipment, it is necessary to comprehensively improve equipment management levels and work quality ； Among these approaches, relying on computer technology and network management techniques to establish a digital work platform for equipment management, using computer systems to control the entire process of equipment asset management, and promptly transmitting information related to equipment operation and maintenance that affects work, is an important way to ensure that the capabilities of equipment are utilized to the fullest extent within an optimized management system – and this is key to modernizing equipment management. V. The relationship between ERP and Equipment Management System (EAM): EAM is an intelligent management system of the expert database type that is useful for enterprises. Handle multi-system coexistence and data flows. Based on the enterprise’s level of control over data, the important and less important modules can be distinguished through the overlapping functional modules. Integrate from a business and functional perspective. Weaken some functional modules of one system, while strengthening other functional modules of another system. Solve integrated data sharing and access. Integration between systems is divided into data-level integration and sharing-level integration. If data exchange with other systems occurs during implementation. A detailed analysis of the data structures of the two systems can be conducted. Based on the analysis results, design a plan; if there is process integration in business operations, middleware is also required, and a detailed plan for secondary development should be outlined. Each system should specify its clear requirements. It is specifically implemented in detail as a middleware. VI. Application of the EAM Equipment Management System After thorough research and investigation into equipment management systems, we have gained a clear and practical understanding of the need to develop a computer-based system for equipment management that meets our requirements, as well as of how such a system can be used to improve and enhance existing management levels. (1) By introducing a new equipment management computer system, it will be developed on the basis of an advanced Equipment Asset Management (EAM) system. There are two main objectives: first, by establishing a digital work platform and leveraging information technology, the work processes related to asset management, operational management, maintenance management, and spare parts management will be optimized, thereby achieving the goals of minimizing maintenance costs, reducing operational expenses, and maximizing operational efficiency for equipment assets ； Secondly, by implementing an EAM management system, it is possible to optimize the allocation of equipment resources along with technical resources, human resources, financial resources, and material resources; through this overall optimized management approach, the capabilities of the equipment can be utilized to the fullest extent. (II) In conjunction with the introduction of computer management systems, an equipment asset management system that is compatible with modern management practices should be established. The main components of this system are as follows: A basic equipment asset management system is developed based on the theory of equipment life-cycle management; this includes: (1) establishing a standard information structure for equipment assets, thereby integrating the management of equipment, operations, maintenance, and spare parts ； (2) Establish a comprehensive database or knowledge base of technical, management, and operational standards for equipment, using the various components of the equipment as the data objects ； (3) Establishment of a life-cycle management model for equipment; by collecting and analyzing the costs associated with equipment assets throughout their lifecycle, it is possible to quantitatively evaluate and analyze the economic value, operational performance, quality of management efforts, and efficiency of such assets, thereby providing support for decisions regarding equipment maintenance, renovation, and replacement ； (4) Establish a evaluation and analysis system for key performance indicators (KPIs) of equipment management ； (6) It automatically integrates data records related to the entire lifecycle of a device – including procurement, installation, operation, changes, depreciation, maintenance, repair, lubrication, and disposal – to create a comprehensive device management archive that includes dynamic data. The establishment of this asset-based management system will help to improve the management of equipment assets, such as by strengthening monitoring of asset operations, introducing life-cycle cost management methods, and adopting a management approach focused on the efficiency of equipment asset operation. This will gradually lead to the adoption of a modern management philosophy that treats investments in fixed equipment assets as an important component of capital. In particular, the introduction of life-cycle cost management methods can support decisions regarding equipment maintenance, renovation, and replacement. Specifically, when the cost of maintaining a piece of equipment is higher than its current net asset value, that maintenance plan should be re-evaluated. When the equipment’s service life exceeds its economic life cycle, and the increase in maintenance costs does not result in a corresponding increase in the equipment’s operational value (the residual value of the equipment due to maintenance being lower than its net asset value), this maintenance plan should be re-evaluated, with consideration given to the possibility of technical upgrades. After the technical renovation of the equipment, if the increased life-cycle costs of the equipment result in a decrease in its operational value, then the plan for such technical renovation should be re-evaluated. Establish a equipment operation early-warning system centered on inspections and fault analysis. Including: (1) Data collection and processing related to equipment operation and shutdown, as well as analysis of the equipment’s operational efficiency ； (2) Establishment of a fault system and fault analysis to reduce the downtime caused by failures in key equipment; (3) Computer-based management of inspections and preventive checks; (4) Reliability management and reliability assessment of equipment; (5) Data collection and processing for condition monitoring (such as vibration analysis, oil analysis, infrared analysis, ultrasound analysis, etc., through offline monitoring); (6) Preventive maintenance management, etc. These management functions and methods will comprehensively improve the technical management and on-site management of equipment, transforming equipment management from a passive to an active approach. Establish a diversified modern maintenance management system suitable for actual conditions, centered on standardized maintenance and preventive maintenance: this includes (1) developing a comprehensive task planning model for eight types of maintenance, namely fault maintenance BM, periodic maintenance PM, condition-based maintenance CBM, reliability-centered maintenance RCM, major equipment overhauls, technical upgrades, on-site repairs, and component replacements ； (2) Daily maintenance plan management ； (3) Preventive maintenance management ； (4) Maintenance resource balancing and maintenance ticket management ； (5) Establishment of maintenance standards, analysis of maintenance cycles, and creation of a maintenance standard database ； (6) Maintenance decision (strategy) analysis, etc. Through the implementation of these management functions, the standardization of equipment maintenance is improved, and a diversified maintenance management system suitable for actual conditions is gradually established, thereby laying a long-term technical foundation for enhancing maintenance quality and reducing maintenance costs ； And by analyzing the maintenance cycles of important and critical production equipment, it ensures their long-term operation ； Furthermore, it is also possible to make use of maintenance resources (technical resources, human resources, spare parts resources, etc.), with an emphasis on optimizing spare parts resources. By establishing a connection between equipment and spare parts, as well as between spare parts themselves, a reasonable level of spare parts inventory can be achieved, thereby reducing the financial burden associated with holding large inventory levels of spare parts. ) for optimal configuration, to achieve the most cost-effective ticket scheduling. Establish a digital management system to achieve reasonable inventory levels and optimal procurement of spare parts. Including: (1) Establishing early-warning systems for spare parts inventory, evaluation methods for appropriate stock levels, supply lead times, analysis of manufacturer reliability, and a unified management model for various types of warehouses, providing a self-learning function for inventory evaluation* ； (2) Based on the maintenance task plan, appropriate inventory levels, and early warning mechanisms, procurement plans are automatically generated or prepared. The optimal inventory levels, the quantity of spare parts in transit, and the estimated quantity of spare parts to be issued are calculated and analyzed. Plans for replenishing inventory and for emergency purchases are developed, and strict control over procurement plans is exercised in order to achieve effective control over spare part inventory. A digital work management platform is established to monitor and control management processes, providing technical means for the continuous optimization of these processes. The system will incorporate advanced workflow management technologies; through business process modeling, a digital work management platform will be created. Using this platform, it is possible to monitor online the status and progress of each job position, each work plan, and each task within the equipment management system. Additionally, through a work log database, statistical analyses can be conducted on employees’ completion rates of work plans and their efficiency, thereby identifying any unreasonable aspects in the management processes and enabling the optimization of those processes on an ongoing basis ； Moreover, the business process models established serve as a very important knowledge base and rule set for our factory; they enable the reorganization and redesign of management processes, as well as the continuous improvement and optimization of those processes. VII. Technical Requirements for the EAM Equipment Management System 1. Design Principles of the Equipment Management System: Advancedness: The design scheme utilizes market-leading and mature technologies to ensure that the project ranks at the forefront among similar projects in China. It adopts market-leading and mature technologies in terms of system architecture, technical approach, system platform, and system functions. Scalability: The architectural design should be able to accommodate the development of new business initiatives in the future; in addition to meeting the requirements of existing applications, the system must have sufficient scalability. Maturity: The selected underlying software products have been tested by the market. The underlying software products have withstood years of market testing, and hold a position of high maturity and technological leadership in the domestic EAM sector. Security: It employs mature international security technologies to prevent unauthorized users on the Internet from gaining access, thereby effectively protecting data that legitimate users do not wish to make public. Standardization and openness: Strictly adhere to international standards, and actively promote the establishment of standards in new fields where such standards have not yet been established. From network protocols to operating systems, everything adheres to common international or industry standards, ensuring the legality of using software products. While adhering to international and industry standards, we also place special emphasis on carrying out industrialization efforts for the systems in collaboration with clients during the project construction phase, thereby supporting the establishment of internal standards and knowledge accumulation within our factory.