Yallourn Energy Powers Maintenance Efforts with MRO Software”s Strategic Asset Management Solution: An MRO Software Case Study

Based in the Latrobe Valley in the Australian state of Victoria, 150 kilometers
east of Melbourne, Yallourn Energy operates Australia’s second largest open cut
coal mine and owns and supplies the Yallourn “W” Power Station. The station produces
about a quarter of the State’s electricity needs – a tenth of the nation’s power
– from four generating units with a combined capacity of 1,450 megawatts.

Until it became the first Victorian generating entity to be privatized in 1996,
Yallourn Energy was a part of the State Government-owned State Electricity Commission,
Victoria (SECV). Over the years, the SECV deployed different purpose-built legacy
systems for maintenance and inventory control at each mine and power station.
At the time of privatization, a service bureau took over all the legacy systems
and reinstalled them offsite. Yallourn then relayed the maintenance information
to the bureau for processing.

In order to streamline operations and reduce IT and inventory costs, Yallourn
Energy realized that they needed to rationalize the business process with just
one replacement asset management system across the whole operation. It was also
decided to dispense with the service bureau and install and manage the new system
in-house. Management also adopted a “no customization” policy at that time because
the legacy systems being replaced had been heavily customized. These legacy
systems were expensive and difficult to maintain, and the only people who knew
how to upgrade them were actual system developers.

“We needed a system that was not only robust enough to help us maintain the
assets that supply a quarter of the State’s electricity needs, but also one
that needed no customization,” commented Steve Brown, Yallourn Energy’s Production
Services Manager. “MAXIMO® met these requirements.”

More than 300 employees use MAXIMO for all aspects of asset management including
services and materials, contracts, job plans and infrastructure maintenance
for buildings and roads. Logs show that there are usually up to 75 people accessing
the system at any one time, including employees located at Yallourn Energy’s
office in downtown Melbourne. The value of the assets that MAXIMO helps Yallourn
maintain is staggering. For example, there are five bucket wheel and chain dredgers
at Yallourn’s open cut brown coal mine that cost up to A$80 million each.

More than two years after taking MAXIMO live, Yallourn Energy continues to
successfully maintain the pragmatic and economic “no customization” policy.

“We might change a screen here and there, but we don’t go anywhere near the
system flow or code,” continued Brown. “Using MAXIMO without any customization
does not compromise any of the functionality we need to run our business, and
the ease-of-use makes maintenance of the system affordable as we do all our
own upgrades.”

In addition to IT savings on upgrades, MAXIMO also saved the organization millions
of dollars in inventory. “MAXIMO helped us reduce inventory levels from 20,000
to 17,000 items,” stated Brown. “This represented a savings of more than A$7.0
million. In addition, we reduced inventory staffing by 25 percent, and reallocated
those labor resources to other roles within the organization.”

Yallourn Energy also uses MAXIMO to procure the parts it needs to keep its
assets up and running. MAXIMO checks the availability of the required parts
from internal sources first and then if the part is not in stock Yallourn Energy
leverages MAXIMO’s electronic requisitioning capability.

Yallourn Energy also saved significantly on IT infrastructure costs. “We discontinued
a service bureau that was costing us some A$680,000 a year and replaced it with
an in-house infrastructure that cost us A$220,000 in year one, including setup
costs and the training of 380 people over an eight-week period. Costs are now
flattening out at around A$80,000 per year, a yearly saving of A$600,000.”

Yallourn Energy is now undergoing significant modernization, development and
structural changes. These include a joint venture that will see the development
of a new coal field that will produce coal for Yallourn through the year 2032.

“As we continue to change the business in response to the competitive national
electricity market, we are confident that MAXIMO can accommodate our growing
needs,” concluded Brown. “MAXIMO was the most user-friendly IT implementation
experienced by our company. We’ve had minimal need to call support. We didn’t
need external help with our last upgrade, and we don’t anticipate the next upgrade
being any different.”

Goals:

• Decrease inventory levels

• Minimize IT infrastructure costs

• Implement a system that needs no customization to adapt to their business

Results:

• Reduced inventory levels from 20,000 items to 17,000 items and saved
more than A$7 million

• Decreased yearly IT infrastructure costs from A$680,000 to A$80,000,
a yearly savings of A$600,000

• No customization implementation of MAXIMO did not compromise any the
functionality as the system met Yallourn’s business needs