April - Library

AMMJ
The CAM-I Capacity Model
Maintenance Enginering and Engineering Economics
CAM-I is the acronym for Consortium of Advanced Manufacturing International, a not for profit private
organisation with valuable contribution to industrial management. It developed a capacity analysis tool,
a semaphoric model that divides one facility’s capacity into three major categories: green (productive
capacity, used to produce goods and to improve processes), yellow (unused capacity) and red (non
productive capacity, busy with sterile activities such as waiting, reprocessing and maintenance, among
others). Thus, to CAM-I maintenance is not a value adding activity. However, the same capacity model
takes a 24/7 (24 hours a day, 7 days a week) schedule as a world standard. How does this capacity
availability come by? What makes it possible? Maintenance, I guess…
Is the 24/7 regime possible? What is the best ME can do to deliver maximum productive time to a
particular facility? Thus, what would be, in the state of the world, the net available productive time, given
the best ME solution? I would love to see these questions answered.
There Comes Engineering Asset Management
Economists developed some interesting approaches to the analysis of business firms. Let me introduce two:
1. The Resource View of the Firm
It consists in viewing the firm as a pool of productive resources – labour, equipment, materials and so on. Resource
based concepts oppose long established view of firms as pools of products, therefore giving more importance to
marketing than to technology and operations, let alone maintenance engineering. In the eighties, it also represented
a different standing vis à vis the Japanese lead in many manufacturing fields.
2. The Process View of the Firm
This approach puts a coordinate set of process and activities between resources (basic inputs) and cost objects
(final outputs). Its heyday occurred in the nineties with the emergence of the radical proposals of reengineering
and activity based costing – sometimes wrapped together under the name of activity based management.
RESOURCES PROCESSES COST OBJECTS
If I had to choose, I would pick the process view of the firm. Why? Because it adds processes to resources, it asks
us to look at how resources are used by the firm. Resources flow to or are consumed by cost objects through
processes. Not every cost object is also a revenue object: some are (for instance, saleable goods), some not (such
as support of community activities).
However, and possibly, accountancy influence upon activity based costing has resulted in replacing costs of
resources for resources properly. People often speak of depreciation instead of fixed assets, salaries but not
labour etc. I strongly argue in favour of starting from physical resources, to only later translate their use in terms of
money spent. This leaves me very comfortable with Engineering Asset Management, as regards physical assets.
Not every resource in taken into account, but a very respectful share of them is.
What is good news here? First, physical assets mean high cost, low decision reversibility and technology choice.
After you have decided to buy a particular equipment, a lot of money must have been spent, you will have to keep
the item for many years and the choice of technology will spread its effects over other resources – labour, specially.
I could have added that buying a new machine is a manly source of pleasure… EAM comes to rescue all involved
in these decisions and consequences from a lack of a sound framework to analyse every business case.
Second, EAM invites EE to assist in every step conducive to more effective management of resources. If this
invitation is not yet loud and clear, let us make it. Economic sense has to be made of any decision that costs money
to both private and public bodies. Take the case of public infrastructure. Official reports abound giving us notice
that infrastructure swallow huge budgets just to get maintenance and yet display a very unsatisfactory state.
Third, EAM is a multidisciplinary field, where different eyes (and minds behind them) look at the same problem:
how to do the best with our physical assets. I hope EAM will in the near future become an interdisciplinary field,
where eyes will see others and minds will strive to think together. Engineers are problem solvers by nature. As
problems rise and get ever more difficult to tackle, engineers must improve their preparedness. Before managing
physical assets, they are defied to manage intellectual assets. Time is now.
Notes:
1. J. G. P. Côrtes recently retired from the Universidade Federal do Rio de Janeiro (UFRJ) and is presently working
as a private researcher and consultant.
2. As far as I can see, engineering economists are not aware of the rapid advancement of EAM. They should.
Vol 24 No 2