Reducing supply chain problems 16 May 2023

supply chain enterprise asset management

The impact of supply chain issues on industry services has highlighted the importance of having an effective enterprise asset management (EAM) solution in place, writes Alan Cambridge, CEO of enterprise asset management specialist Peacock Engineering Ltd

Despite the current supply chain problems, 2022 research by Aldermore Bank found that very few SMEs fully understand their supply chain. Over a third of UK SMEs only know their direct suppliers. Two out of three business leaders have never conducted a supply chain audit or put contingency plans in place. The ability to plan ahead to counter the impact of delays is crucial for businesses, so a limited awareness of supply chains leaves a significant proportion of UK SMEs vulnerable.

In the lifecycle management of assets, leveraging AI, sensor data, inspection results and historical maintenance records can help to enable predictive maintenance strategies. This can reduce downtime and outages caused by breakdowns and failures, and provides insight and guidance on when spare parts and stock need to be ordered, and how far in advance. EAM solutions such as IBM Maximo and IFS have specific supply chain offerings that integrate closely with the EAM asset data.

These supply chain solutions also have a big advantage for users: being able to track availability and delivery times of spares and supplies automatically, and to route purchase orders to different suppliers according to the prevailing availability, price or other conditions. When supply chain management is integrated with the EAM, it can tell not only when spares will be needed, but also how long the lead time will be. It can select from alternative suppliers based on set criteria, which could be price alone, or, in times of scarcity or supply disruption, other factors such as availability and proximity.

Another major benefit of EAM-based supply chain solutions is that they provide detailed information on actual delivery times, actual product quality, and failure rates. These can feed in directly to automatic purchasing decisions, and can also give you useful extra leverage when negotiating with suppliers.


Heavy industry, utilities, energy and infrastructure are sectors in which EAM is dominated by IBM Maximo. IBM Maximo’s supply chain management is included in its MRO Inventory Optimisation module.

In an MRO environment, users can assign criticality values for parts based on a number of variables, including:

  • What equipment is the spare part for, and how critical is that equipment to operations?
  • Where is the supplier based – is it a volatile location?
  • Who supplies the part - an OEM or a third party?
  • What is the lead time required to deliver the part?
  • Is the part used on multiple pieces of equipment?
  • What is the target service level?
  • The supply chain solution can be optimised to meet business objectives, for example:

  • providing customers with the maximum service level, which could mean paying more for parts in order to obtain them as fast as possible
  • maintaining the minimum level of inventory to help meet financial or budgetary constraints
  • operating at the lowest possible cost, which could involve building in longer lead times for restocking parts.
  • EAM supply chain solutions can make most MRO purchasing decisions automatically, based on pre-set criteria. But they will also typically enable manual intervention for certain types of transactions, to ensure internal security, integrity and probity standards are maintained. These could include items above a certain value threshold.

    EAM supply-chain solutions have an important part to play in the evolution from a focus on cost-efficiency towards risk-resilience and sustainability by giving businesses much-needed information.

    Alan Cambridge

    This material is protected by MA Business copyright
    See Terms and Conditions.
    One-off usage is permitted but bulk copying is not.
    For multiple copies contact the sales team.