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Accenture recommends that agribusinesses take a strategic approach to asset maintenance for improved operating performance.
The agribusiness industry is extremely sensitive to asset availability and productivity. Asset maintenance is critical to becoming cost-competitive, given the significant proportion of operating costs it represents for the industry.
Accenture recommends that companies acquire a broader view of asset reliability and performance to improve operating efficiency.
This point of view suggests ways for agribusinesses to drive productivity, control costs and become high-performing asset managers.
Agribusiness companies worldwide face various challenges including:
Maintenance strategy and sponsorship: Businesses mostly see maintenance as a function of operations or have weak strategies in place that prevent incremental gains being made over time.
Aging equipment and workforce: Many businesses have old equipment that are inefficient and difficult to operate. In addition, there is the challenge of aging workforces in mature markets and the continuous battle for resources in developing economies.
Rapid growth: Many companies, particularly in emerging and developing economies, have grown exponentially and find themselves competing on a global scale but with a comparative gap in productivity.
Asset maintenance may pose significant challenges for agribusinesses but it also offers compelling opportunities.
Accenture has identified five pillars of an effective approach to asset maintenance:
Asset maintenance strategies: The maintenance team should plan routine maintenance and equipment shutdowns to guarantee availability, reliability and cost optimization.
Processes and practices: Companies must create a structured approach to identify improvement opportunities that yield an excellent return on investment while increasing safety and regulatory compliance at the same time.
Information and automation technology: Businesses need to leverage information and automation technology as key enablers to optimize processes and deliver excellent performance.
Asset performance management: Agribusinesses need to manage asset maintenance effectively to reap the potential gains. They must have a system in place that measures the performance and outcomes of initiatives.
Governance, organization and people: Agribusinesses should have the right workforce culture and attitude toward maintenance—not just have the systems and processes in place. The workforce culture plays a big role in embedding the process improvements and must be supported by the company’s leadership.
A high-performance asset maintenance capability enables agribusinesses to achieve business imperatives that help increase shareholder value and profits. Benefits include:
Improved operating margins: Higher asset reliability and better maintenance improves operating margins—not just by reducing expenses but by increasing revenue.
Greater capital efficiency: By deploying a formal program for asset reliability and maintenance, businesses can sustain the productivity and life cycle of their equipment.
Improved safety, compliance and quality: A robust asset maintenance process helps in improving employee safety by preventing accidents; complying with environmental regulations by monitoring machinery waste; and maintaining high-quality products.
Accenture has identified four elements that would help agribusiness companies transform into world-class asset maintenance organizations:
Develop a single, holistic program: Companies must start an umbrella program, covering all the existing asset management initiatives and spearheading future projects.
Put maintenance on the executive agenda: To reach the next level of maturity and performance, maintenance should gain executive-level focus, so that it gets the authority and accountability needed to effect real change.
Achieve total mobilization: All business units should be involved and accountable when it comes to maintenance transformation.
Focus on short-term results and long-term benefits: Maintenance transformation does not occur overnight. Businesses must understand that it evolves through the development of maintenance strategies, followed by several supporting actions throughout the organization.
Accenture also recommends learning from the leaders.
Over the past few years, energy companies have invested in new technology and processes that integrate asset management and production processes, analyze asset performance data, and transmit the relevant information to users consistently and in real time. This approach has brought energy companies numerous benefits and prepared them for the future.
Accenture recommends that agribusinesses follow the example of energy players to achieve high performance in the form of lower costs and better results.
October 4, 2012
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