Yallourn Energy Powers Maintenance Efforts with MRO Software''s Strategic Asset Management Solution: An MRO Software Case Study by Chris Trayhorn, Publisher of mThink Blue Book, April 1, 2003 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 Filed under: White Papers Tagged under: Utilities About the Author Chris Trayhorn, Publisher of mThink Blue Book Chris Trayhorn is the Chairman of the Performance Marketing Industry Blue Ribbon Panel and the CEO of mThink.com, a leading online and content marketing agency. He has founded four successful marketing companies in London and San Francisco in the last 15 years, and is currently the founder and publisher of Revenue+Performance magazine, the magazine of the performance marketing industry since 2002.