Cmms and Eams

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CMMS and EAMS

Using Information Technology to Improve Asset Management

Summary
In recent years an evolution of management strategies has led to the concept of "asset management. In this article the role and functionality of information technology is investigated, including Computerized Maintenance Management Systems (CMMS), Enterprise Asset Management Systems (EAMS) and Enterprise Resource Planning (ERP). In this context, Decision Support Systems represent the next logical evolutionary step.

MB02022 Mel Barratt 14 pages August 2004 SKF Reliability Systems @ptitudeXchange 5271 Viewridge Court San Diego, CA 92123 United States tel. +1 858 496 3554 fax +1 858 496 3555 email: info@aptitudexchange.com Internet: www.aptitudexchange.com

Use of this document is governed by the terms and conditions contained in @ptitudeXchange.

CMMS and EAMS Introduction......................................................................................................................................3 Definitions ................................................................................................................................3 System Evolution .............................................................................................................................4 System Functionality .......................................................................................................................6 Work Order and Management ..................................................................................................6 Equipment / Asset Management...............................................................................................6 Planning and Scheduling ..........................................................................................................7 Preventive Maintenance / Predictive Maintenance (PM / PdM) ..............................................7 Inventory Management.............................................................................................................7 Procurement / Purchasing .........................................................................................................8 Budgeting and Cost...................................................................................................................8 Project management..................................................................................................................8 Standard Maintenance Procedure / Job Library........................................................................8 Personnel...................................................................................................................................9 System Selection..............................................................................................................................9 Implementation Issues ...................................................................................................................10 Key Performance Indicators for CMMS........................................................................................10 Decision Support Systems .............................................................................................................11 Conclusion .....................................................................................................................................13 References......................................................................................................................................13

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CMMS and EAMS

Introduction
Information technology has had, in recent years, a tremendous impact upon plant maintenance. The computer's ability to collect, collate, and analyze large amounts of data, and then disseminate the resulting information was the principal factor in the development and adoption of various maintenance philosophies over the last two or three decades. For example, the computer impacted the areas of condition monitoring systems, inspection systems, and Operator Driven Reliability (ODR) systems through provision of automated data capture, combined with improved communications and feedback between operators and maintenance personnel. Information Technology (IT) is also the major driving force behind the evolution of Maintenance Management into Physical Asset Management, and its links to Enterprise Resource Planning. Definitions Asset Management: The organization of an assets life cycle to achieve the lowest life cycle cost with the maximum availability, performance efficiency, and highest quality (maximum OEE) [1]. In other words, asset management is the systematic process of planning and control of a physical asset throughout its life. This may include the specification, design, and construction of the asset, its operation, maintenance and modification, and its disposal. Asset management provides a strong focus on technical aspects of a facts-based, proactive management attitude with a mission, vision, and objectives derived from that of the company [1]. Computerized Maintenance Management System (CMMS): Hardware and software system used to track work orders, equipment histories, and preventive / predictive

maintenance schedules; usually integrated with support systems such as inventory control, purchasing, accounting, and manufacturing; computerized system, to track, monitor, measure and control maintenance and warehouse activities [2]. Enterprise Resource Planning (ERP): Enterprise Resource Planning is an industry term for the broad set of activities supported by multi-module application software that helps a manufacturer or other business manage the important parts of its business, including product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders. ERP can also include application modules for the finance and human resources aspects of a business. Typically, an ERP system uses or is integrated with a relational database system. The deployment of an ERP system can involve considerable business process analysis, employee retraining, and new work procedures [3]. Manufacturing Resource Planning (MRPII): A method for the effective planning of all resources of a manufacturing company that addresses operational planning in units, financial planning in dollars, and has simulation capacity to answer "what if" questions [2]. Material Requirements Planning (MRP): MRP is a set of techniques that uses bill of materials data, inventory data and the master production schedule to calculate requirements for materials [2]. Physical Asset Management: Describes the application of Asset Management philosophies to the physical assets of an organization (i.e. equipment and buildings) to differentiate from management of less tangible assets (intellectual property, goodwill / reputation, etc.). 3

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CMMS and EAMS

System Evolution
MRP philosophies dating back to the 1960s provided a foundation for many new business software applications. However, it was quickly realized that the basic modality of these systems ignored some important factors, such as cost, capital, capacity, engineering requirements, etc. Therefore, MRP evolved into MRPII, which took these, and other additional factors, into account. Typically, MRPII applications provide functionality to deal with high-level resource planning, long-term business planning, capacity planning and shop-floor controls. An important feature of MRPII systems is provision of feedback mechanisms that allow actual performance to be compared with the plan thereby facilitating continuous improvement processes. ERP systems represent a further evolution of the process, driven by a realization that profitability and customer satisfaction also needed to be considered. These systems have integrated functionality for sales forecasting, sales order processing, sales analysis, finance, logistics, and quality control with powerful reporting and monitoring tools. To achieve this high level of integration between various business functions the ERP system typically differs from an MRPII system in terms of technical requirements, such as object oriented programming language, client / server architecture, relational database structure, and open system portability.

The introduction of affordable computers to the business world was the prime enabler for the development of previously described systems, all of which were software based from the outset. Computerized Maintenance Management Systems are different, as they represent exactly what the name implies (the computerization of maintenance management). Today, maintenance managers have to achieve goals using a smaller workforce, while simultaneously being faced with a larger and growing compliance burden imposed by safety, environmental, and other legislation. These factors drove the development of computerized versions of manual processes. The most basic CMMS performs four core functions [4]: Receive goods to stores Store materials and information in a controlled manner Locate and retrieve materials and information Plan, schedule, and report allocation and labor via a work-order system

The continual evolution of these systems Maintenance management and asset provides facilities for management of every management are not synonymous. aspect of the enterprise that affects cost and Maintenance management is essentially a time of getting product to customer. This subset of asset management. However, when concept is known as "Supply Chain considering software systems to assist in these Management." The demands created by areas the boundary between EAM systems and globalization and increased outsourcing are CMMS systems is somewhat blurred [5]. leading to the development of web-enabled Figure 1 attempts to illustrate this. systems, which will undoubtedly become the norm in the near future. 2004 SKF Reliability Systems All Rights Reserved 4

Over recent years many of these early systems have been highly developed, offering more functionality. More sophisticated systems are now often referred to as "Enterprise Asset Management" (EAM) systems and include facilities for management of activities such as: timekeeping, project management, human resources, payroll, and core financial data

CMMS and EAMS

Figure 1. CMMS / EAM / ERP Relationship.

A high level CMMS system that can seamlessly integrate with other business applications is the minimum prerequisite for an effective asset efficiency optimization program. However, an EAM system has the extended functionality to support asset management philosophy. Early MRP / MRPII systems were primarily regarded as "financial" systems, and lacked the functionality for day-to-day management of basic maintenance functions. The missing functionality was added as they evolved into today's ERP systems. Typically, ERP system vendors achieved this by either striking up alliances with companies that have appropriate specialist experience / products (for example, vendors of CMMS, PdM systems, RCM packages etc.). One organization active in this area is the Machinery Information

Management Open Systems Alliance (MIMOSA). MIMOSA objectives are [6]: Formulate and publish consensus conventions that promote the cost effective unification of equipment asset condition, control, maintenance and performance information. Progressively move equipment information management toward open, highest value concepts and interoperable components. Develop compelling financial justification for optimized equipment asset management practices.

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CMMS and EAMS

System Functionality
The current range of systems available is the result of high-level systems acquiring more low-end functionality, and the expansion of the basic CMMS systems to include more enterprise-wide capabilities. In the early days many packages were designed to suit the needs of a particular client, so the site / organization specific nature restricted their spread. At that time MRP/MRPII systems were perceived to be "financial / management" functions, and it was not unusual to find MRP/MRPII systems operating in the same organization alongside CMMS systems, with little or no interchange of data between the two. Indeed, this is still the case in some companies today. However, globalization is a key driver of system development. Today's businesses realize the need for enterprise-wide applications capable of dealing with multiple plants and sites, different currencies and time zones, and even different languages. A number of other factors enabled evolution of today's systems [5]: A general shift in emphasis from large mainframe computers towards networked systems. A shift from proprietary software to open standards such as Microsoft Windows, Relational Databases, Standard Query Language (SQL). Vendor Consolidation Standardization of best features between competitive systems.

Opens, edits, and records work order history. This may include asset number, description of the problem, etc. Records the basic work order information, parts and materials required / asset number to be worked on, a description of the problem or work to be done, when and who requested the work, when to be completed, and the priority of the work. Planning and scheduling of work orders to associate each step with specific equipment, craft foreman, estimated duration, task lists, special tools and equipment required. Provides linking of craft resources, parts requisitions, bills of materials, routes and checklists, safety documentation / permits, material, and labor costing. Work order completion is recorded with final information. Reporting may be available.

Equipment / Asset Management Provides listing and basic data for equipment / assets owned and maintained. May include breakdown of asset information related to hierarchies of systems / subsystems. Information recorded including equipment / asset number, location, maintenance priority, cost, manufacturer, model and serial number, and the dates of purchase and installation. Defines assemblies and spare lists and supporting information, such as calibration data.

Modern EAM systems incorporate a wide range of modules, providing a considerable scope in the functionality [7]. Work Order and Management

Includes detailed support documentation Manages and controls approvals of work associated with the asset: drawings, requests for correcting faults or improving specifications, technical reference asset condition. 2004 SKF Reliability Systems All Rights Reserved 6

CMMS and EAMS manuals, performance standards, extended descriptions, etc. Parts lists usually are formatted and within an integrated system are linked with the inventory management module for data validation. Operational data such as hour meter or temperature reading may be captured to allow usage information to trigger the need for maintenance work or inspection. Tracks failure information at the asset systems / subsystem level through information entered when closing work orders and provides capability to compute various KPIs. Tracks detailed cost history data by type of cost associated with asset (sub)systems. Preventive Maintenance / Predictive Maintenance (PM / PdM) Manages work orders for predefined repetitive and rigidly scheduled PM tasks to preserve good equipment condition. Opens and edits work orders and automatically schedules and records when jobs are completed. Jobs done under PM usually include inspections, lubrications, and changes of finite lifetime items such as filters or seals. An important assignment of PM is discovering needed corrective work, which results in writing the required work order and creating a planned job. Allows for links to process control or PdM systems to obtain critical readings and determine current conditions that initiate actions such as inspection work order or a troubleshooting call. Predictive readings may be interpreted by software / hardware devices to determine whether a problem exists and what is its nature. If a problem is found, a corrective work order is written for the needed work. Any or all parts of this process may be automated.

Planning and Scheduling Manages the detailed planning of the labor, materials, and all other resources needed to complete a work order. Permits defining and sequencing the specific job steps, identifying the required labor, determining estimated times, as well as other resources such as special tools, equipment, contract services, etc. Planned work orders may then be scheduled. Provides ability to allocate and level craft resources for individual jobs as well as larger projects. Supports building a schedule that includes corrective, preventive, and predictive work in a future period. Allows performing availability check on one or more work orders.

The SKF @ptitude solution particularly emphasizes the decision-support elements. Inventory Management Manages MRO parts and materials inventory with the necessary record keeping of items received, stocked, and dispersed as well as their locations in the stockroom. Provides the information needed for managing the stock of parts and materials used in performing maintenance work in multiple stockrooms. 7

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CMMS and EAMS Provides data showing what items are to be ordered, what are available, and what are on order. Data in this module are directly supportive of the planning and scheduling efforts. Integrated with purchasing module to fully support MRO procurement. Warranty information and records may be included as separate module or within this module, coded by vendor with description of warranties and warranty coverage. May include printing of exception reports, warranty claims and follow-up information. Budgeting and Cost Development and management of cost estimates and budgets for maintenance projects and their distribution to various other operating departments. Data managed in this module would include the details of the maintenance budget and provide current cost experience at cost center, project number, equipment location, system / subsystem level, etc. Reports would be designed and used for control of maintenance expenses, chargebacks to customers, and/or activity codes, variance reporting, etc. Structures easy linkage and distribution of applicable costs to the general ledger.

Procurement / Purchasing Provides the mechanism to ensure that proper resources of stock material, nonstock items, raw materials, and outside services are available in an adequate manner to ensure adequate planning of maintenance work. Provides the creation and processing of purchase orders. The module manages the purchasing function, beginning with the automatic creation of a purchase order when the reorder point of a stock item is reached. Data include a list of primary and alternative vendors and prior purchase history information along with vendor performance. Reports available would include current items on order, delivery status, and vendor status and history. May include processes to manage quotations, provide invoice matching, and manage blanket orders and service contracts.

Project management Typically works in conjunction with the work management module for grouping or work orders into specific projects. May offer the ability to time-phase a job and to do sophisticated interactive planning for needed resources as labor, materials, and production facilities. Provides ability to manage projects from a capital projects or a larger-scale construction management point-of-view.

Standard Maintenance Procedure / Job Library A compilation of standard maintenance repair procedures to be used on work orders for specific jobs. The sequence of job step activities, labor requirements, parts, and materials required are listed, along with special permitting and safety requirements. Serves as a valuable guide to work order planning for larger jobs and is updated 8

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CMMS and EAMS whenever a standard repair procedure is changed or created. May include a library of standard times needed to perform specific maintenance tasks. This can be used in planning the time to perform the repair job steps.

System Selection
The process of selecting the correct maintenance management IT system is dependant upon the organizations aspirations and the scope of the required system. It is clear in Figure 1 that selection of an IT system to support an EAM or ERP philosophy involve consideration of more individual business processes than selection of a basic CMMS. This inevitably impacts the size of (and possibly number of) project teams required to undertake the selection. Many companies elect to employ guidance from an outside consultant. However, the project team should still include representatives of the various system users to help ensure a high level of "buy-in" when the time comes for implementation. From the outset the project team should have a clear understanding of the business goals that the proposed system is required to achieve. They must also attain a clear understanding of the business processes involved in achieving the fundamental project goals. This dictates the required functionality and relative priorities. It is likely that 80% or more of the client's requirements can be met by one of the major suppliers, using a standard "off-the shelf" package. Vendor - client discussion should be clear on what the system can do versus what it could do. System customization brings with it a number of issues, including update and support costs. The major systems tend to be very similar in terms of the functionality offered, and update support contracts ensure that additional functionality is added as competing vendors play "catch-up" with one another. Vendor support capability is a major issue, particularly if the selected system is required to work on an international basis with the implications imposed by differing languages 9

Personnel Provides complete management of inhouse crafts personnel as well as contract individuals. Maintains a roster of available employees, their skills, and their training for jobassignment purposes. Maintains a history of where employees have worked for compliance with quality and safety programs. Union agreement restrictions on assignments and past assignment histories, would also be used for scheduling of the work force. Data sharing with other enterprise systems such as payroll, labor reporting, safety, and contract management.

Summary

These modules provide the foundation for an effective asset (maintenance) management system. Many other system functions are offered, depending on the CMMS / EAM sophistication and intended application. The number of vendors offering software packages in this area now exceeds 300. It is important that a CMMS / EAM is viewed as an information technology tool for more effective management, not as a quick fix. Effective installation must be tailored to the specific needs [8].

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CMMS and EAMS and time zones. Once implemented, even a low cost, basic CMMS ultimately represents a considerable long-term investment on the part of the client. Therefore, care should be taken to ensure that the selected vendor has the financial stamina required to fund on-going system development to keep pace with operating system and computer hardware updates. A clear understanding of the vendor's support and update policies and pricing should also be sought to avoid the possibility of nasty surprises after implementation. efficient resource allocation and accurate calculation of costs. Effective utilization of inventory module including for each item, "where used" and "where stored" in addition to normal and re-order stock levels.

Some of these issues may arise from poor system configuration. Others may develop as a result of lack of dedication / acceptance on the part of the organization, perhaps a function of insufficient training or resources. Experience shows that optimization of an existing CMMS may be a cost-effective alternative to replacement.

Implementation Issues
The term "implementation" is often misapplied in the CMMS world. Some CMMS vendors provide little more than assistance with software installation and configuration. In some cases, shortcomings in implementation may not be the direct fault of the vendor. Frequently, the client organization stretches their CMMS budget only to allow basic operator training and perhaps development of some customized reports. This leaves little funding or resources for implementation issues [9]. In consequence, many installed CMMS systems fail to achieve their intended goals. Often the perceived answer is re-evaluation of the software rather than the manner in which it was implemented. Typical issues that can reduce system effectiveness include, but are not restricted to: Completeness and accuracy of asset register. Work orders that contain either too much or too little instruction, and adequate classification of types of work, to align with reporting requirements. Over complicated "pick-lists" and "lookup" tables.

Key Performance Indicators for CMMS


Like all other aspects of asset management the EAM / CMMS should be subject to a process of continual improvement. This requires use of selective Key Performance Indicators (KPIs) to measure system performance and to provide timely warning of opportunities for system improvement. KPIs applicable to such systems might include [10]: Total Maintenance Labor Costs as indicated by CMMS as percentage of Total Maintenance Labor Costs as indicated by accounting systems. Total Maintenance Material Costs as indicated by CMMS as percentage of Total Maintenance Material Costs as indicated by accounting systems. Total Maintenance Contracting Costs as indicated by CMMS as percentage of Total Maintenance contracting Costs as indicated by accounting systems. Total Number of equipment items entered to CMMS as percentage of total number of equipment items in plant.

Correct and accurate structuring of the manpower resources module, to ensure 2004 SKF Reliability Systems All Rights Reserved

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CMMS and EAMS Total number of part items in CMMS as percentage of total number of part items in plant. Total number of preventive maintenance tasks in CMMS as percentage of three times the total number of equipment items in plant. (This indicator provides a theoretical check on the level of PM coverage, based on some fifteen years plus experience). Total maintenance costs charged to individual plant items as percentage of total maintenance costs from accounting. Ratio of maintenance employees (or full time equivalents) to number of supervisors or coaches. Ration of maintenance employees (or full time equivalents) to number of planners Ratio of total hourly maintenance personnel to total number of maintenance overhead personnel Data analysis should provide meaningful reports to facilitate informed maintenance decision-making. The purpose of the CMMS is to guide management and help the continual improvement of the maintenance process. Yet despite this, a study of CMMS systems currently available reveals that virtually all of them lack true decision support capability. Unlike production processes, maintenance activities are often perceived as unpredictable and non-repetitive, thereby rendering them unsuitable for systemization. However, improved maintenance data capture, facilitated by CMMS systems, coupled with increased take-up of techniques, such as PdM, TPM, ODR, etc. changed this perception. An event that may not be normal in the eyes of domain experts occurs at a regular interval within an enterprise (such as a motor failing every 6 months) it can still be classified as a normal event. The often-cited "80-20 Rule" is as applicable to maintenance as to any other area of business. Around eighty percent of maintenance decisions can probably be regarded as routine guided by a combination of common sense and good engineering practice tempered with past experience. Skills are acquired through training and by practical experience. Historical maintenance data can be accessed from the CMMS / EAMS system. Accessing past experience is another matter, as much of this usually exists only in tacit form (i.e. it is held in the heads of individual maintenance personnel). The reliability and maintenance management consultants at IDCON Inc. report that their clients indicate an attrition rate among maintenance craft personnel between 40% and 60% over five to seven years. Furthermore, only 10% of these clients have a good apprentice program or other plan for skill retention.

Decision Support Systems


Successful CMMS systems rely heavily on the collection of accurate maintenance data. Facilities are provided for analysis of this data in all but the least expensive systems (which sometimes rely on exported data). Big players in this field offer real time data logging and the ability to share data across networks (Table 1) [11].
Price Range
Feature Data Collection Data Analysis Real time Network Decision Support Table 1. CMMS Features as a Function of Price.
$1.5K+ $15k+ $45k+ $65K+

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CMMS and EAMS Loss of, or the inability to access valuable experience can cost an organization. It allows past mistakes to be repeated with associated consequences in terms of cost, downtime, and lost profit. One recent study showed that Fortune 500 companies stand to lose some $31.5 billion by 2003 due to re-work and the inability to find information. The concept of viewing employees and their accumulated knowledge and experience as "intellectual assets" led to a current high level of interest in techniques to capture, structure, control, and manage this aspect of an organization's operation. The Return on Investment (ROI) potential of such initiatives is viewed as very high, possibly in excess of 1000%. Therefore, the introduction of decision support functionality into the CMMS sets out to integrate Intellectual Asset Management (more commonly referred to as "Knowledge Management") with Physical Asset Management, and thus represents the next logical evolutionary step for CMMS / EAM systems. One example of such functionality is the @ptitude system from SKF Reliability Systems. The basic outline of this system is shown in Figure 2. This software module can be integrated with systems from a range of CMMS, PdM, and DCS vendors. In its current state of development the @ptitude system focuses on subjective and objective machine condition information derived from operator inspection activities, perhaps undertaken as part of a formal Operator Driven Reliability (ODR) program. The system also makes provision for the more detailed, objective data captured by formal PdM activities. SKF's 100 plus years of experience with rotating machinery was used to develop a technique called Asset Knowledge Science, which is used to build the decision process tree which the system employs to: Ensure inspection / monitoring processes are appropriate, complete, and justified. Provide the machine-specific and process context, within which, data analysis is automatically undertaken.

Figure 2. @ptitude Decision Support Module.

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CMMS and EAMS The module uses work history detail, obtained through interface to CMMS, as part of the decision making process, and interfaces with the CMMS to request work orders for appropriate remedial actions. Links are also provided to relevant documentation, which may be stored in digital form in the system. Moreover, the decision process tree continually improves as additional experience is gained. For example, in the event of unexpected failures, the output of root cause failure analysis is employed to further refine / add to the rule base.
Benefits of Decision Support

Some links are provided here to a range of solutions providers, although the list is by no means exclusive. These sites may provide useful sources of additional information to complement and expand on the discussion outlined here. API Maintenance Systems: http://www.apipro.com/ DPSI: http://www.dpsi-cmms.com/ FrontLine: http://www.shiresystems.co.uk/ GenesisSolutions: http://www.genesissolutions.com/ Indus International: http://www.indus.com/ Intentia: http://www.intentia.com/ Mainsaver: http://www.mainsaver.com/ MAXIMO: http://www.mro.com/ SAP: http://www.sap.com/ Synergen: http://www.synergen.com/

Implementation of Decision Support Systems offers significant benefits. These may include: Knowledge may be captured across multiple disciplines such as: o Maintenance o Reliability o Operations Captured knowledge may be shared locally or globally, allowing people to learn from the experience of remote colleagues (multiple plants and sites). Automation of data analysis and decisionmaking leads to: o Less scope for errors o Better time utilization Reduced training time for staff in new positions.

Conclusion
CMMS / EAM systems play an important role as a prime enabler to achieve effective management of physical assets. The advent of decision support capability within such systems brings aspects of intellectual asset management to complement existing functionality and enable more effective use of data contained in the core system(s).

Additional Information Sources


The range of software solutions now available to support the maintenance / asset management function is vast. Solutions of offer range from basic single-user packages costing a few hundred pounds through to sophisticated EAM systems capable of managing the assets of a world-wide enterprise.

References
[1] Institute of Asset Management: http://www.iam-uk.org [2] McKenna T & Oliverson R, "Glossary of Reliability and Maintenance Terms", Gulf 13

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CMMS and EAMS Publishing Company, ISBN 0-88415-360-6, 1997. [3] www.whatis.com [4] "An Introduction to CMMS", White paper Tompkins Associates (1998): http://www.tompkinsinc.com [5] Campbell J D and Jardine A K S, "Maintenance Excellence, Optimizing Equipment Life-Cycle Decisions", Marcel Dekker Inc, ISBN 0-8247-0497-5, 2001. [6] MIMOSA: http://www.mimosa.org [7] Peters, R.W., "Maintenance Management and Control". In Handbook of Industrial Engineering - Third Edition. Eds. Salvendy, G. John Wiley & Sons Inc., 2001. [8] Eade G. "Computer Aided Maintenance Management Systems". In Asset Maintenance Management, eds. Wilson A., Aldon Press, Osney Mead, Oxford, 1999. [9] Bertolini D (Life Cycle Engineering Inc), "Maximum CMMS - Re-installation helps facilities get the most out of underutilized features and functions" Maintenance Solutions Journal, April 2002. [10] Wireman T, "Developing Performance Indicators for Managing Maintenance", Industrial Press Inc, ISBN 0-8311-3080-6, 1998. [11] Labib A W & Exton T, "Spare Parts Decision Analysis - The missing Link in CMMS's (Part1)", Maintenance & Asset Management journal, Vol. 16 No3, 2001.

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